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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.

Question of the Day: What's the greatest British car ever?

The British automotive industry has produced everything from high-production econo-commuters to staggeringly luxurious oligarch-wagons, along the way winning plenty of races and building plenty of beautiful machines. The original Mini led directly to the past half-century of transverse-engine, front-wheel-drive cars built everywhere, the MGB put the sporty little convertible into everyone's reach, and the Morris Oxford became the most beloved motor vehicle in India. So many to choose from, but we want you to pick one. What will it be? Related Video:

The Mini Clubman club is too small, so it's reportedly on the chopping block

The Mini Clubman, the company’s wagon-ish entry into a range that includes two-door versions, four-doors, convertibles and small SUVs, is reportedly about to get its club membership revoked. Some published reports say that the cult favorite, which has seen its sales drops to less than 2,500 units last year, will be discontinued in just about a year, likely with a special last edition. A spokesman for Mini USA did not confirm or deny the report, but in an email said that it was “speculative.” Clubman sales have been on the decline since the model's peak in 2016, when the second generation was introduced. The first-generation Clubman stood out from the pack with its suicide rear doors and barn doors instead of a traditional hatch; it later matured into a more conventional shape. The larger, more utilitarian Countryman bit into sales of the Clubman, and now a larger version of that SUV is in the works. Mini has also shown its Aceman concept, an electric crossover that could eventually join the brand's lineup slotted between the Cooper and the Countryman. Earlier this month, the company, which is part of BMW, detailed that some Hardtop and Convertible models can be ordered with stick shifts going forward. There was no mention of the Clubman. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.