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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.

Production Mini Rocketman still in the cards, but not without a partner

There's not really any way around it - the new Mini Hardtop isn't all that mini. Considering its supposed to be the smallest model in the brand's lineup, this is hardly desirable. It's good news, then, that rumors are cropping up of a smaller Mini, based on the well-received Rocketman Concept that debuted in 2011 at the Geneva Motor Show.
The report, which comes from our friends at AutoGuide, claims that a production Rocketman is still on the radar of Mini's product chief, Pat McKenna, despite being officially on hold. As Mckenna explained it to AG, "the only way it would happen would be if it was a partnership with another company."
See, the problem is that Mini's current UKL platform, which underpins the new Hardtop along with the future Mini range, is too large for the tiny Rocketman. And since developing new platforms isn't as easy as popping down to the shops for a gallon of milk (nor as cheap), it makes the need for an ally to split the costs a necessity. Success, so far, has been limited.

Mini knows how you take your coffee after a test drive

Mini Netherlands wanted to give its countrymen a good reason to test drive its cars, so it threw in a free cup of coffee with the spin - but not just any old cuppa joe. Cars were fitted with a sensor that analyzed the driver's style. The chip was then placed in a special coffeemaker that produced a blend to match the driving; middle-of-the-road test pilots would get a lungo (long) coffee, test-the-rollcage types were given a ristretto (short, and stronger).
The knock on the head for U.S. drivers? Milquetoast test drivers were given an Americano - a watered-down espresso. You can watch the unique promotion at work in the video below.