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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 restores a pair of soapbox racers it built in the 2000s

Rolls-Royce inaugurated its current headquarters in Goodwood, England, in 2003, but it started making cars there before the plant was officially opened. It built a soapbox racer called RR-0.01 in 2001 and manufactured a second example named RR-0.02 the following year. These one-offs were raced at the Goodwood Festival of Speed and largely forgotten about until they were given a full restoration in 2024. Building a soapbox racer might sound odd for a brand that develops some of the world's most luxurious cars. Rolls-Royce explains that entering the Goodwood Festival of Speed's Soapbox Challenge was a way to preview what was then a new chapter in its history. In just a few short years, it had been sold to Volkswagen by a company named Vickers and sold again to BMW after an intense round of negotiations. It had split from Bentley, its longtime sister company, and it was forced to build a new plant, a new headquarters, and develop a new range. The soapbox racers were made by some of the same workers that later manufactured models like the Phantom, and they featured a Rolls-Royce-esque design thanks largely to a bright grille with vertical slats. It should come as no surprise that these weren't your typical home-brewed racers built on a gutted riding lawnmower chassis. Rolls-Royce used carbon fiber, fiberglass, and aluminum to keep the 0.01's weight in check, for example, while the 0.02 featured a formula racing-style steering rack, wood trim, as well as leather upholstery. The two racers also stood out with several unusual design cues: 0.01 wore a hare-shaped hood ornament while 0.02 got a "??" logo above the grille. Rolls-Royce notes that its soapbox racers last competed in 2013; during the event, 0.02 reached 72 mph, which is remarkable (and a little scary) considering it's powered solely by gravity. They were stored in as-raced condition until the company asked a team of apprentices to fully restore them. The work performed included repairing parts damaged during racing, including 0.01's grille and 0.02's wood cowl. Both freshly-restored racers will be displayed at the Rolls-Royce Enthusiasts' Club's headquarters in Northamptonshire, England. Featured Gallery Rolls-Royce's RR-0.01 and RR-0.02 soapbox racers Design/Style Rolls-Royce

Rolls-Royce, Lamborghini utilities await approval from German parents [w/poll]

A cursory look at the top of the automobile market would suggest that the world's carmakers are gunning it full steam ahead into a new stratosphere of ultra-luxury and high-performance utility vehicles. After all, companies like Bentley and Maserati are preparing to launch their very first crossovers, while established players like Mercedes-Benz and Land Rover keep producing ever more expensive sport-utes of their own. But that's not the case across the board.
Rolls-Royce, for example, has yet to receive the green light to start working on its proposed CUV project. Though the dimensions of its sedans may already eclipse those of some crossovers, this would be the first time that Goodwood would produce a utility of its own. But while the British automaker's financial performance may have earned it a degree of autonomy, the final call may still come down to parent company BMW, which just might be waiting to see how Bentley fares with its upcoming crossover - and how much money it brings in to the Volkswagen Group - before deciding on whether or not it should proceed.
However, Rolls-Royce may not be alone in waiting for its German parent company to approve its high-priced ute. It's been two and a half years since we first laid eyes on the Lamborghini Urus (pictured), but the Italian automaker reportedly has not yet received approval from its parent company Audi and the greater Volkswagen Group to proceed with development and production. Envisioned to share its platform with the next Volkswagen Touareg, Audi Q7, Porsche Cayenne and the production version of the Bentley EXP 9 F concept, the high-riding Lamborghini was originally set to reach production as the marque's third model line in 2017. But while Audi drags its feet - potentially waiting to see how the Bentley version pans out - the Urus' launch keeps getting pushed back, if it's ever to be made at all.