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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.

Five bikes from EICMA you need to know about

Each and every year, the world's biggest motorcycle manufacturers gather together in Milan, Italy to show off the latest and greatest machinery that will soon be offered to dealerships the world over. It's called EICMA (Esposizione Internazionale Ciclo Motociclo e Accessori), and this year's crop of new motorcycles is just as exciting as ever.
We've selected five of the coolest motorcycles shown at this week's show, including models from Aprilia, BMW, Ducati, Honda and Yamaha. Join us down below for a high-performance, two-wheeled Italian journey.

Alpina bringing new B4 Bi-Turbo Cabrio to Geneva

Interested in picking up a new BMW 4 Series with a turbo six? You've got options: you can get the 435i with 300 horsepower or spring for the M4 with 425 hp. But if it's the convertible model you want, we're afraid you'll be limited to the latter as the M division can't help you (at least not for the time being). But that's where Alpina comes in.
The aftermarket tuner closely associated with BMW offers the B4 Bi-Turbo (at least in Europe) with that same 3.0-liter twin-turbo inline-six massaged up to 410 horsepower that starts to pose a threat to the M4. What's more is that the Alpina's 442 pound-feet of torque eclipses the M4's 406 lb-ft, to say nothing of the 435i's 300.
Best of all, Alpina just confirmed via Facebook that it'll offer the B4 in convertible form, bringing the resulting BMW Alpina B4 Bi-Turbo Cabrio to the Geneva Motor Show. We'd expect the weight penalty to knock it slightly off the coupe's quoted 4.1-second 0-60 time, but not by much. If only BMW were to bring this one Stateside like it does with the B7 sedan.