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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.

BMW mulled ten, eight, and six-cylinder engines for i8 before going hybrid

There's little doubt that the 2015 BMW i8 is one of the most radical and groundbreaking performance cars this industry has seen in a long time. From its unique carbon-intensive construction to its 1.5-liter, three-cylinder and electric motor plug-in powertrain to its concept-car appearance, the flagbearer for BMW's new i venture challenges the very notion of what it takes to be a supercar.
Yet apparently the i8 almost didn't do that at all. Yes, it probably still would've had innovative assembly techniques, serious performance and come-hither bodywork, but according to a new report in the Telegraaf, it was very nearly a much more conventional beast, drawing its power from a V10 engine. According to the report, that line of development never got much beyond the drawing board, but BMW engineers then shifted their focus to both V8 and six-cylinder motivation, going so far as to build prototype cars. The higher cylinder-count engines were eventually dropped altogether after BMW decided to turn the i8 into a hybrid, with the six-cylinder reportedly nixed due to heat management and weight issues. In the end, of course, BMW went with the PHEV powertrain that offers a total system output of 362 horsepower and 420 pound-feet of torque - plenty of thrust for this lightweight, all-wheel drive coupe while still enabling an incredible 94 miles to the gallon on the EU cycle. Regardless of how it turned out, it's still fascinating to think that BMW didn't have a much firmer conceptual idea of what it was after when it started the i8's development.
Here at Autoblog, we're genuinely thrilled about this new generation of greener hybrid super- and hypercars, a movement spearheaded by the i8, Porsche 918 Spyder, Ferrari LaFerrari and McLaren P1. But even so, our inner-gearheads can't help but wonder what might have been had BMW pursued a more conventional i8, either in place of, or in addition to, the car they did build. What do you think? Have your say in Comments.

What does the open patents deal mean for Tesla ... and BMW?

Gift to the world or trade bait? Tesla Motors announced this week it would open its patents for other automakers to use. That has analysts guessing whether the California-based electric-vehicle maker is looking to either swap trade secrets with other automakers or to expand the proverbial pie that represents the plug-in vehicle market. For its part, Tesla says the answer is B. BMW, which is establishing its i sub-brand of plug-in vehicles, would be a natural collaborator with Tesla, Forbes says. In fact, executives from the two companies met in Europe this week. Details were not released, but a BMW spokesman said, "Both companies are strongly committed to the success of electromobility and discussed how to further strengthen the development of electromobility on an international level." While Tesla brings battery technology to the table, BMW offers its carbon-fiber advancements that lighten vehicle-body weight. Those advancements are key to range-extending efforts and could do wonders for Tesla on its journey to help spur technology for the sake of getting more of the general public to accept plug-in technology as a viable first-car option. Then again, Forbes says Tesla, whose investors include Mercedes-Benz parent Daimler and Toyota, may be keeping its best technologies to itself by not patenting certain advancements at all. What's in Tesla's patent pool? uAutoInsurance analyzed Tesla's 249 patents and found that 104 of them related to battery technology, while 28 pertained to recharging activity, which wasn't surprising (about a quarter of those 249 patents couldn't readily be categorized). Tesla also has nine patents related to sunroof technology. The company is based in California, after all.