March 15, 2019 / 10:33 AM / 6 days ago

BMW warns of difficult 2019 as it posts lower 2018 profit

The new BMW The 7 is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Denis Balibouse

FRANKFURT (Reuters) - BMW will step up cost cutting in anticipation of a difficult year, the German carmaker said on Friday, as it reported a 7.9 percent fall in 2018 operating profit due to higher investments in electric cars and currency headwinds.

“We expect strong headwinds to continue to effect the entire sector in 2019,” Chief Financial Officer Nicolas Peter said in a statement.

“In view of current developments, we intend to further broaden and significantly intensify these (cost-cutting) efforts,” he said, adding the company would reduce the number of vehicle variants on offer.

As a result, BMW will not make a successor to the 3 series Gran Turismo model, it said.

BMW’s 2018 earnings before interest and taxes fell to 9.12 billion euros (7.8 billion pounds), just ahead of the 8.94 billion euros forecast by analysts in a poll.

The carmaker said its return on sales for its automotive division fell to 7.2 percent from 9.2 percent a year earlier, as investments in electric cars and a price war triggered by new emissions tests weighed on profit.

Reporting by Edward Taylor; Editing by Thomas Seythal and Mark Potter

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