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BMW warns of manufacturing costs

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German car maker BMW has told investors there will be a 10% loss in pre-tax profit for 2019, as the company are to cut costs by £10.3bn.

The company’s operating profit dropped by 7.9% in 2018, the cost cutting plan announced on Wednesday will counteract spiralling technology investment costs along with unpredictable markets.

The on-going Brexit saga, the trade stand-off with the US and China and volatile market conditions are making it “difficult to provide a clear forecast” BMW said.

Nicolas Peter, chief financial officer said, “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.”

BMW added, “Unfavourable currency factors and higher raw materials prices are expected to have a medium to high three-digit million negative impact.”

The car makers operating margin is expected to fall between 6% and 8% in 2019 compared to a 7.2% margin for 2018, over their core automotive division.

BMW announced in February if the UK withdraws from the EU with a no-deal Brexit, they could move operations for the manufacturing of the Mini out of the UK to Holland.




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