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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.

2016 Mini Cooper Convertible First Drive

Conventional gearhead wisdom says to go for the biggest, most powerful engine. For the first two generations of Mini Convertible, this was a no-brainer. You bought the Cooper S. But as Senior Editor Alex Kierstein argued in our first drive of the Cooper S soft top, the less-powerful Cooper Convertible has an ace up its sleeve: a highly entertaining, three-cylinder, turbocharged engine. After some time behind the wheel, this two-time Mini Cooper S (hardtop) owner is ready to say the Cooper Convertible is the droptop Mini you should buy, full stop. The Cooper's 1.5-liter turbocharged three-cylinder makes just 134 ponies and 162 pound-feet of torque. That's a 55-horsepower deficit and an extra 1.5 seconds, compared to the Cooper S. But who's clocking a Mini Convertible with a stopwatch? The 8.2 seconds it takes to get to 60 mph is perfectly adequate , and the triple's power delivery is addictive. Peak torque comes in at 1,250 rpm, making for effortless acceleration around town. The engine is positively diesel-like in the way it generates twist below 4,000 rpm, and the way it runs out of steam well before its 6,500-rpm redline. But this isn't annoying. There's more than enough torque to make the Cooper's acceleration sprightly around town. Think about it this way: The Cooper S' 2.0-liter turbo has enough power to rescue you from bad driving. But because of the turbo lag and the wheezy top end, the base Cooper forces you to manage your momentum. In that way, it's not unlike the Mazda MX-5, Toyota GT86/Subaru BRZ, and other so-called "momentum cars," that require drivers to maintain speed for a good corner exit. That, friends, is fun. But some of the car's shortcomings are less fun. We praised the triple's "offbeat, enticing growl" in our first drive, but this is still a three-cylinder engine and it vibrates like one. There's a diesel-like clatter from the direct-injection system on cold starts. And when rolling off the line at part throttle, the triple sends a weird vibration right to our hips. It disappears quickly as the speed increases, but the sensation is consistent enough to be annoying. Aside from the interesting powerplant, the best driving goodies aren't reserved only for the Cooper S. Tick the right boxes, and the regular Cooper can fit the adaptive dampers we raved about on the Cooper S first drive – Dynamic Damper Control is a $500 standalone option or included in the $1,750 Sport Package.

Psychology can wipe out 20-25% of your EV's range

There are two primary takeaways from a recent study of electric-vehicle driving habits in Germany. One: an electric vehicle with 25 percent of its battery charge left creates the same reaction in drivers as the fuel needle on "E" in a gas-powered car. Two: familiarity breeds comfort. The study, conducted by Germany's Technische Universitat Chemnitz and funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, put some real numbers on the concept of "range anxiety." According to Green Car Congress, that anxiety truly kicks in when there's less than a quarter of the driving range left on an EV's battery and the study found that a typical car's range is "shortened" by a 20 to 25 percent "psychological safety buffer." If we take the popular Nissan Leaf as an example, the official 84-mile single-charge range is really closer to 63 miles in the head of the driver. The longer the driver spent in the EV, the shorter his mental buffer became. The study was culled from data involving just 79 drivers who tooled around Berlin in Mini E EVs for about six months, collectively putting a quarter-million miles on the electric vehicles. The good news is that the longer the driver spent using the EV, the shorter his mental buffer became, which meant he could comfortably get more miles from the car. So, to all you EV advocates out there, know that once drivers spend some time with an EV, they get more and more used to what the car can do. It's a lesson we've learned before. Just remember that to new EV drivers, the single-charge range is a lot smaller than the one old-timers see.