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BMW warns profits will fall, plans $13.6 billion in cost-cutting

FRANKFURT, Germany — BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, Mini and Rolls-Royce brands are to get a single sales division. Peter said that given the headwinds to earnings, "we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions." The company said the measures were needed "to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future." Automakers around the world have faced heavy up-front costs for technology expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo. BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules. BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S.

2016 BMW 3 Series First Drive [w/video]

If the 3 Series were a person, it would suffer from crippling anxiety. This has nothing to do with the way the car behaves on the road, and it's not a result of its styling. No, it's because so many people expect so much from the 3er. The model is held to the highest standard, which it tends to set itself, and when it doesn't deliver, it hears about it. So it was when BMW introduced the F30 3 Series sedan for 2012. This was a good 3 Series, but few thought it was great. The car lost some of its edge, instead chasing the comfy-luxury crowd that arguably makes up more of the buying public. The vocal Bimmer-loving minority wasn't pleased. Critics, us included, called the car out for its soft suspension tuning, less-than-perfect electric power steering, and chintzy interior details. Enthusiasts instead waxed nostalgic about the E90 generation that came before. But now, the 3 Series can relax again. BMW managed to address most of the issues in this F30 refresh for 2016. The suspension has been reworked, the steering programming overhauled, and the interior is now more befitting a dignified sporty thing from a luxury brand. For good measure, BMW is introducing a new turbocharged 3.0-liter inline-six with more power that the car didn't really need. BMW is introducing a new turbocharged 3.0-liter inline-six with more power that the car didn't really need. That new engine comes with a new out-of-thin-air badge, 340i, replacing the 335i and its N55 six. The updated 3 Series sedan will continue to be offered as a 320i with a turbo four, and both sedan and wagon keep a 328i with a higher-power version of the same engine, as well as a 328d turbodiesel. While those models' engines are unchanged, they all benefit from minor exterior styling updates (lights and bumpers) and the de-cheapified interior, as well most of the mechanical updates. Most of the content from the former Sport Line package, like Sport seats, the Sport transmission, Sport gauges, gloss black exterior trim, and black exhaust tips, is now standard on all but the 320i. Those extra standard features and the new engine bump the price up $2,050, from $44,745 for the 2015 335i sedan to $46,795 for a 340i. Our test drive focused on the 340i, since it's got the new engine. The B58 mill is a single solitary cubic centimeter off of the N55 3.0-liter's it replaces, but it's based on a new modular architecture.

BMW names new head of M division

BMW's performance division has been run by Dr. Friedrich Nitschke since 2011, developing, among other products, the new M3 and M4. But soon the good doctor will be retiring, and BMW has just named his successor.
Taking Nitschke's place as chairman of BMW M GmbH will be Franciscus van Meel (pictured at right), who until recently served as managing director of Audi Quattro GmbH - the rival outfit that makes Ingolstadt's performance models, including the R8 supercar and RS line of performance models.
Van Meel will join BMW on October 1, presumably to learn the ropes from Nitschke before the 59-year-old executive steps down at the end of the year. Back in January, Audi named Heinz Peter Hollwerweger as head of Quattro GmbH and reassigned van Meel to its Beijing R&D center, a role which evidently didn't suit him as well as creating Autobahn-storming German muscle cars.