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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.

Former BMW M boss and Maserati CEO killed in freak motorcycle accident

It's a tragic coincidence that on the same weekend the BMW M4 Coupe Concept was introduced in Monterey, one of the men most integral to BMW's M and Motorsports divisions, Karl-Heinz Kalbfell, was killed in England. Kalbfell, a vintage motorcycle enthusiast, was set to compete in the Lansdowne Classic Series at Brands Hatch and had an accident during a practice session. After going wide at Druids Corner and falling, he was hit by a competitor following close behind and died of his injuries after being transported to hospital.
Kalbfell, an engineer, began his career at BMW in 1977 in the communications department; a decade later he was chairman of BMW M GmbH, overseeing development of some of the cars responsible for the myth of M. In 1994 he was named chairman of BMW Motorsport, and his cap full of feathers includes getting the BMW V12 into the McLaren F1, getting the BMW V8 into two Morgan cars, along with developing BMW's Formula One engine and return to the sport. Not incidentally, he also assumed leadership of Project Rolls-Royce after BMW bought the British marque in 1998, which means he oversaw the Goodwood factory upfit and the creation of the Phantom.
He left Rolls-Royce for a brief stint at Fiat, heading Alfa Romeo and Maserati, then went into consulting for clients like Lotus and Paragon, who built the Artega GT. As Autocar notes, Kalbfell "had an abiding sense that customers needed to be attracted to cars by their aura and reputation, not just their engineering." He will be missed.

Rolls-Royce Wraith Luminary Collection gets celestial headliner

Rolls-Royce has announced a new bespoke collection for its Wraith 2-door luxury coupe that is highlighted, literally, by a headliner full of glittering shooting stars. It's called the Wraith Luminary Collection and its production will be limited to just 55 examples. The car is like its own planetarium on wheels, thanks to a starlight headliner concocted by the folks at the Rolls-Royce Bespoke Collective in Goodwood, West Sussex. It's a handwoven configuration of 1,340 fiber-optic lights mimicking the night sky — and even the occasional shooting star — and it takes 20 hours to configure. Rolls-Royce says eight shooting stars fire at random, mostly over the front seats. Open up the suicide doors and you'll see the celestial theme continued inside the cabin. Tudor oak wood veneer, sourced from forests in the Czech Republic and chosen for its depth of color and grain structure, is back-lit by 176 LED lights that permeates through intricate perforations in the veneer that form another starlight pattern at the touch of a button. "Linked to the controls of the starlight headliner, the cabin's veneer surrounds Wraith's occupants in an ambient glow of light," the luxury marque says. Outside, the Luminary Collection comes pained in Sunburst Grey with rich Saddlery Tan-colored lines hand painted along the bonnet and side body, a color scheme inspired by "the heady shade of the golden hour's sunrays" and referencing the interior leather color scheme. It's also echoed in the center of each wheel. Cockpit seats come trimmed in the same tan leather, while rear seats feature a contrasting Anthracite leather or an available Seashell color for the leather, matched by a two-tone steering wheel. The seats get contrasting piping and stitching tying the colors together. Also new is a hand-woven stainless steel fabric, a new technique for luxury goods borrowed from industrial uses, for the center console and door panniers. Each swath is made up of strands between 0.08 and 0.19 millimeters in diameter and takes three days to produce in a clean-room environment. Finally, the collection features stainless-steel tread plates engraved with the words, "Wraith Luminary Collection — One of Fifty-Five." Prices weren't announced, befitting the brand's aura of exclusivity, but the Wraith starts at a mere $320,000.