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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.

Mini 're-evaluating' relationship with Abby Wambach following DUI arrest

Mini USA is "re-evaluating" its relationship with former US Women's National Soccer Team star Abby Wambach after the 35-year-old was arrested for driving under the influence on Sunday morning. Wambach was just one of the athletes that joined Mini's recently launched "Defy Labels" campaign. She was driving a 2014 Land Rover Range Rover – not a Mini – at the time of the arrest. "We're obviously concerned about the alleged DUI attributed to Abby Wambach. This behavior is against the values we promote as an organization and the safety of everyone on the road is a priority here at Mini," the company said in an official statement obtained by Automotive News. "Because of this, we are re-evaluating her association with the brand and are pulling content that individually features Abby from our marketing. We will continue to assess the situation and weigh our options." Wambach was arrested in Portland, OR after running a red light in her Range Rover. Her blood alcohol content was not released by the Portland Police Bureau, although she was described as "polite and courteous" throughout the affair, according to a statement. You can see the Super Bowl ad featuring Wambach below. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Mini John Cooper Works Paceman is a hot hatch crossover coupe

The Mini John Cooper Works Paceman, the seventh in the JCW line and called "the first Sports Activity Coupe in its class," is here. It takes its place at the top of the Paceman food chain with a 1.6-liter, twin-scroll turbocharged engine putting out 218 horsepower, with 201 pound-feet of torque on tap and 221 lb-ft available with overboost. Those numbers get the JCW Paceman from zero to 62 miles per hour in 6.9 seconds with either the six-speed manual or automatic transmission, but top speed with the automatic is one mile per hour shy of the manual's 140 mph. Fuel economy has been rated at a combined 35.8 US mpg on the EU cycle.
It earns its JCW stripes with a suspension that's been lowered by 10 millimeters over 18-inch lightweight alloys, Mini's ALL4 all-wheel drive, an aero kit to beef up its profile, plus a sports exhaust with dual chrome pipes. Inside, a sport steering wheel and plenty of contrasting materials represent the lineage, further emboldened by Chili Red accents to match the exterior.
The Mini JCW Paceman will say "'Allo, guv'nor" to the world at the Detroit Auto Show next month, then hit showrooms in March. The press release just below can tell you all you want to know about it until then.