The BMW Group has warned that it expects profits to fall this year due to 'challenging' business conditions, but it has also said that it's on course to help shape ‘premium mobility’ in the areas of electrification and autonomy.
The German firm recorded a pre-tax profit of £8.4 billion in 2018, an 8.1% decline on 2017 despite a slight 1.1% increase in sales across its BMW, Mini and Rolls-Royce brands. As with other car firms, it was hit by challenges including the market downturn in China, the introduction of the WLTP emission regulations, the threat of trade wars and political uncertainty including Brexit.
BMW finance boss Nicolas Peter said the firm’s 2018 performance “did not meet our usual high standards” and warned that “significant currency and commodity headwind” mean BMW anticipates pre-tax profits will fall further this year.
BMW is currently in the midst of implementing its Number One > Next strategy, designed to restructure the business for the future, including investment in electrification, autonomy and connectivity. BMW said the efficiencies introduced by the plan would lead to £10.3bn of cost cuts, achieved through increased digitalisation of design and development. No jobs are due to be affected.
The plan also involves a focus on new models and powertrains. BMW will launch 20 new and updated models this year, including plug-in hybrid versions of the 3 Series, 7 Series, X3 and X5. The electric Mini SE hatchback will also go on sale this year, with the BMW iX3 following in 2020. The i4 and iNext will follow in 2021, with 12 electric cars due to launch by 2025.
BMW is focusing on two new flexible vehicle platforms, and it says that will lead to it cutting up top 50% of its current drivetrain variants, enabling it to “focus on the products most in demand". The firm also says it will reduce the complexity of its portfolio, likely by trimming less profitable model lines. It has confirmed that it won't replace the 3 Series Gran Turismo.
BMW chairman Harald Krüger said: “We remain firmly on course, having established a strong position as one of the world’s top providers of e-mobility”, adding that BMW is “firmly setting its course for the future”.