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Home / Business / BMW warns of a significant decline in profits in 2019 and seeks to save $ 13.6 billion on costs

BMW warns of a significant decline in profits in 2019 and seeks to save $ 13.6 billion on costs



  An employee installed at the BMW assembly plant in Greer, South Carolina, interior in a BMW X4 sports car on the assembly line.

Luke Sharrett | Bloomberg | Getty Images

An employee installs interior accessories in a BMW X4 sports car on the assembly line at the BMW assembly plant in Greer, South Carolina. On Wednesday, BMW said the group's pre-tax profit would drop more than 10 in 2019 and announced a comprehensive cost saving and efficiency plan of $ 12 billion ($ 13.6 billion) to cover higher technology investments and To compensate for currency costs. Last week, BMW said it would accelerate the cost savings in anticipation of a difficult year, as operating income in 2018 fell 7.9 percent.

The consolidated profit before taxes is expected to be well below the level of 2018, said the Munich-based carmaker.

"High volatility makes it difficult to make a clear statement," said BMW.

"Depending on the conditions in which the conditions develop, our guidelines may be subject to additional risks, in particular the risk of a no-deal-Brexit and ongoing developments in international trade policy." CFO Nicolas Peter said.

BMW said it would extend the Group's efforts to increase efficiency and reduce costs.

"By the end of 2022, potential efficiency gains totaling over € 12 billion are expected. BMW said in a statement.

Some of these would be created by ramping up digital simulations to shorten development times of new vehicle models by a third.

"Among other savings, digital simulations and virtual systems Validation could mean that around 2,500 expensive prototype vehicles will no longer be needed by 2024," said BMW.

The high cost of developing electric and self-driving cars will continue to weigh on earnings.

MW expected The operating margin of the automotive division will fall between 6 and 8 percent this year, which is below the target of 8 to 10 percent. Last year, the operating margin of BMW was 7.2 percent.


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