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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.

Rolls-Royce mulling V16 roadster, SUV

Rolls-Royce may be working on a new, mega-powerful roadster for 2017. CAR reports the convertible would conceivably boast a V16 engine. Of course, the report gets a little muddled here, with CAR saying the engine would be very similar to that of the one that powers the Bugatti Veyron - the French machine makes use of a W16 mill. Even so, the article says the Rolls-Royce version could put down around 700 horsepower. Design wise, we're told the creation will feature a suitably long nose with the passenger compartment pushed far to the rear.
Of course, 2017 is a long way off, and the thought of a 16-cylinder, naturally aspirated engine bowing under the crush of ever more stringent government fuel efficiency and emission regulations seems unlikely. We'll just put this one in the wait-and-see file for the time being. In the interim, you can hop over to CAR for a closer look at the magazine's rendering of the would-be roadster. If a V16 convertible does happen, look for a smug look on Rowan Atkinson's face.
Oh, and about that SUV? There's not much to report, though CAR does note that officials are keeping a close eye on rival Bentley and its plans for a luxury utility vehicle. Rolls brand boss Harald Krüger has even gone so far as to admit "we're regularly debating whether to take action."

Looking for a deal? Check out your nearest Acura dealer

For the fourth time in the last year, an Aston Martin out-discounts all other automakers by offering the largest monetary savings off the retail price of an automobile in America. This time, though, the discount isn't on the aging (though still beautiful) Rapide sedan or range-topping DBS Superleggera, it's for the DB11 sports car. For those keeping track, the DB11 also led this discount list back in May of 2020. This time, though, the price is even lower than before. Right now, buyers of the Aston Martin DB11 are seeing discounts of $24,330. That's a 12.1% cut off the car's average retail price of $201,820 and it means buyers are paying an average transaction price of $177,490. Still expensive, but really not bad for a drop-dead gorgeous machine with as much as 630 horsepower. Next in line is a familiar face, the Acura NSX. As impressive as the Japanese hybrid supercar may be, Acura has been running big rebates on the NSX for as long as we've been running these lists. This month, the NSX buyers are seeing discounts of nearly 14% for an average transaction price of $138,648. The third biggest discount this month shows up on the most expensive vehicle on the list. The Rolls-Royce Phantom carries an average sticker price of $537,500. But buyers are getting about 4% off that for an average transaction price of $516,333. It may not be a massive discount when measured by percentage, but when the asking price is so high, even a small discount equals big bucks. Related Video: