Let’s face it, electric vehicles are the future of automobiles. So what does a savvy manufacturer like BMW do, they start weeding out the models that don’t fall into their electric future.
BMW will weed out its model lineup to reduce costs as the German luxury-car maker copes with a cooling global economy and persistent trade tensions that show little sign of resolution.
“The challenges facing the entire sector are unlikely to diminish in the coming months,” Chief Executive Officer Harald Krueger said Friday in a statement presenting preliminary results. “Great efforts will therefore be needed across the entire group to help shape the sector’s transformation under such conditions.”
The company will also reorganize its management board, consolidating sales of BMW, Mini and Rolls-Royce under a central position headed by Pieter Nota, who was responsible for BMW brand sales so far. Peter Schwarzenbauer, leading Rolls-Royce and Mini cars as well as digital businesses at the Munich-based carmaker, will leave the company at the end of October when he turns 60.
BMW earnings have been pressured by tariffs on vehicles made at its plant in Spartanburg, South Carolina, and sent to China, as well as price competition in Europe. Carmakers across the globe reduced targets last year after new emissions testing and concerns over Brexit added to the industry’s woes. BMW’s return on sales in the core automotive division dropped to 7.2 percent from 9.2 percent in 2017, below a historical 8 percent to 10 percent range.
BMW said it won’t make a successor to the 3-Series Gran Turismo, even though the current model is selling well. More derivative versions will also be eliminated. The carmaker said it will step up other measures to reduce complexity, without specifying them. BMW cut its proposed dividend by 50 cents to 3.50 euros per common share.