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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.

China’s Great Wall looking to partner with BMW to sell cars in the West

The Chinese automaker Great Wall seems to have moved on from courting Fiat Chrysler. According to Reuters, the company announced in a stock exchange filing that it's looking to collaborate with BMW's Mini brand in some way. Reuters also reports that BMW is open to discussion. We reached out to a BMW representative, and he provided us with an official statement regarding the news. The company didn't specifically say it is talking with Great Wall. What it did say is that it has had success with its current partnership with another Chinese automaker Brilliance, but also that the company is interested in expanding the Mini brand worldwide and in China. The statement says that Mini's future strategy and expansion will include "diversification of partnerships and new cooperation models." It also said that expanding in China "is only possible with a local partner." That sounds to us like BMW is pretty interested in working with Great Wall. This move comes about a month and a half after Great Wall attempted to purchase parts of Fiat Chrysler. The company was reported to be talking to FCA to purchase the Jeep brand, and it later confirmed that it was interested in that brand, a few, or the whole company. But things seemed to fall apart when Fiat Chrysler's CEO Sergio Marchionne announced it hadn't received any offers and wasn't working on any kind of deal with another company. Now it may seem a little odd that Great Wall would shift from trying to buy an SUV brand, or a company that is beginning to concentrate on crossovers and trucks, to one that specializes in compact cars. After all, they're fairly different segments. Our theory is that Great Wall isn't necessarily interested in the specific products, but more that it's looking for a gateway to Western car markets. It's not something new for the company. As far back as 2013, the company made it clear it was looking to start selling cars in America. It also started looking into a manufacturing facility in Mexico earlier this year, which would supposedly supply vehicles to both Mexico and the U.S. Now when Great Wall announced its American sales intentions, it was targeting a date of 2015. That obviously didn't happen, and it probably has something to do with the company's products. Most of the cars under the Great Wall and Haval brands bear an uncanny appearance to discontinued models from other companies that compete in the West.

Mini recalls 86,000 hatchbacks, convertibles from 2002 to 2005

Mini is recalling 86,018 cars built for model years 2002 through 2005 over concerns about the power steering system. The affected vehicles include both R50 Cooper and R53 Cooper S hatchbacks as well as convertibles (where applicable). Mini's public communications with the National Highway Traffic Safety Administration over the issue are decidedly oblique and simply pointing out owners could "experience temporary or permanent loss of the electro-hydraulic steering assistance." Worryingly, Mini claims it's aware of 20 accidents and five injuries due to the power-steering issue. This isn't the first time Mini has had problems with the power steering systems on these first-gen Coopers. The automaker had so many claims of bad power steering pumps and cooling fans that it upped the warranty on those units to 13 years or 150,000 miles for the same 2002 to 2005 models being recalled here. This author's personal 2006 model is on its third fan and second pump, though that year has never officially been investigated or recalled. A slight drop in steering assist and a low-battery warning at engine startup are the main signs your car needs recall work. Owners of the affected hatchbacks and cabrios will be notified by Mini and asked to report to their local dealer to have the electrohydraulic steering system's wiring and components inspected. Any repairs will be done free of charge. Read on for the official NHTSA bulletin. Related Video: Report Receipt Date: OCT 15, 2015 NHTSA Campaign Number: 15V660000 Component(s): STEERING Potential Number of Units Affected: 86,018 Manufacturer: BMW of North America, LLC SUMMARY: BMW of North America, LLC (BMW) is recalling certain model year 2002-2005 MINI Cooper and Cooper S vehicles and 2005 Cooper and Cooper S Convertible vehicles. The affected vehicles may experience temporary or permanent loss of the electro-hydraulic steering assistance. CONSEQUENCE: If the vehicle experiences a loss of power steering assist, extra steering effort will be required at lower speeds, potentially iincreasing the risk of a vehicle crash. REMEDY: MINI will notify owners, and dealers will inspect the electro-hydraulic power steering system, replacing the components and wiring, as necessary, free of charge. The recall is expected to begin December 1, 2015. Owners may contact MINI customer service at 1-866-825-1525.