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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.

BMW M4 vs. Lexus RC F in Head 2 Head sports coupe showdown

It's the showdown everyone's been looking forward to, the East versus West grudge match of the year. We're talking, of course, about the BMW M4 versus the Lexus RC F.
Although BMW uses a twin-turbo straight-six and the Lexus uses a free-breathing V8, the two are pretty closely matched on paper: a luxury coupe with over 400 horsepower channeled to the rear wheels.
The BMW has been doing these cars for longer, and the M4 boasts a higher power-to-weight ratio. But then the RC F has more power - and without forced induction to break up the rev range. So which is the better luxury muscle coupe? Watch the latest episode of Motor Trend Head 2 Head to find out.

Watch the BMW i8 get wrung out on the Ring

Been wondering where the heck the reviews of the all-new, plug-in-hybrid BMW i8 have been? After all, the car isn't exactly new, having debuted in concept form way back in September of 2009. In August of last year, we even tested a prototype of the new supercar. Despite that, though, we still haven't gotten a crack at the actual vehicle that will be sold to the public.
Well, we're happy to tell you that we're currently testing the i8 and will have a proper review for you soon. If, however, you're just aching for some coverage of the low-slung plug-in, we have a short video of it in action around Germany's famed Nürburgring.
Despite it's three-cylinder, turbocharged gas engine, the i8 sounds pretty angry as it laps the Ring. That is, until it has a little bit of a breakdown. According to the guys that caught the car on video, it appeared the i8 had a minor brake issue, and was parked on the side of the track for a good 15 minutes, with the driver pumping the brakes. We should probably just take this as proof, then, that manufacturers are actually using the Ring for testing, and not just messing about.