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.