BUSINESS OF CAR-MAKING

BMW CUTS ITS COSTS AS SALES DIP

BMW WILL weed out its model line-up to reduce costs as the German luxury carmaker 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 Harald Krueger said 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.” BMW earnings have been pressured by tariffs on cars made at its plant in Spartanburg, South Carolina, and sent to China, as well as price competition in Europe. Carmakers across the world 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 cut. The carmaker said it will also step up other measures to reduce complexity. BMW cut its proposed dividend 50 cents to 3.50 euros per common share. Carmakers aren’t “supermarkets, there is no reason to sell everything,” said Juergen Pieper, an analyst at Bankhaus Metzler. The shares rose 1.3 percent to 74.75 euros in Frankfurt, trimming losses to 8.2 percent.