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BMW CEO looking for further cost cuts

08/11/2008, 5:30 PM

By Drew Johnson

Tough economic times are being felt throughout the auto industry, with no automaker being completely isolated from the downturn. Even luxury car makers such as BMW are feeling the pinch, which is why the German automaker’s CEO has announced further cost reductions.

Industry analysts predict that BMW’s profits will be down 40 percent this year, with the outlook looking just as bleak in 2009. In order to stop the bleeding, BMW CEO Norbert Reithofer has announced a new initiative to reduce the outflow of cash.

The first part of Reithofer’s plan called for the cancellation of BMX’s X7 program, according to Automotive News. Had the X7 made it to production, it would have been a large SUV intended to take on Land Rover’s Range Rover.

Reithofer also canceled $128 million in construction costs allocated to the building of two new sales branches.

Interestingly, the cost cuts also involve BMW’s hot-selling MINI brand. Reithofer wants to see a reduction in MINI’s production costs, and has also vowed to build the MINI and BMW X1 on the same platform if a deal between MINI and Fiat is not reached.

Labor cuts are also on Reithofer’s docket, with non-core functions – such as fleet-driver services and food-service functions – to be outsourced to outside companies.

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08/11, 5:55 PM

posted by:

howsmydriving

How about cutting costs by not re-designing every model every three weeks….

08/11, 6:04 PM

posted by:

mayer_ray_nagin

Idea #2: Don’t waste money on fabric-wrapped fruity concepts.

08/11, 6:35 PM

posted by:

olds307

I don’t know how, BMWs are already built cheap as possible. Maybe they can get rid of the stupid plastic cover sitting on top of every engine.

08/11, 7:11 PM

posted by:

rds130

Quickest way to cut costs: stop producing models JUST to make them. Sports Activity Vehicles? Between both Mercedes, Volkswagen and BMW, I can count a number of unnecessary products that are supposed to fill niches considered rather pointless.

08/11, 9:45 PM

posted by:

zoomzoomer

So the BMW X1 will be FWD based? Seems like a niche they should steer clear of.

08/12, 12:44 AM

posted by:

RTT10

cheap??? “olds307″ go suck on something..

08/12, 1:24 AM

posted by:

DriveCritic

Hopefully the inevitable cost cutting will not lead to a downturn in quality.
—-
This post has been listed on http://www.DriveCritic.com/

08/12, 4:56 AM

posted by:

razr1983

bmw is not what it used to be …

08/12, 5:16 AM

posted by:

GT Pro

RTT10, olds307 would be right if he lived in the U.S – I can get a brand-spanking new M5 for a measly $83,900. But since I can’t be sure of his location, I won’t go into that.
But as the 4th poster said, BMW has too many products, many of which are useless (a la X6, 1-series).

08/12, 7:21 AM

posted by:

DeansterTJ

Simplify the engine lineup a bit. Does the 3-series really need two V6s, a V8, and a diesel? Why are they making so many ****ing SUVs?

08/12, 10:40 AM

posted by:

shaver

Mini CVT transmissions wont last 60K, clutches are as delicate as fine china. Its the size of a go cart but is more $ then most mid-sizes. Is there really any where else to chinse out.

“Industry analysts predict that BMW’s profits will be down 40 percent this year”
Clearly BMW is heavily reliant on US for profits and the weak dollar is killing them.

08/12, 3:42 PM

posted by:

brassmonkey

BMW, do this:
- Kill X6
- Kill all the other ‘design studies’
- Fire Bangle before he ruins designs beyond recovery
- Kill Mini Clubman (why do we need a big small car?)
- Take a pay cut, Norbert!

08/13, 2:08 PM

posted by:

RTT10

GT pro, the 1- Series isn’t a bad idea. the X6 sort of but they needed a a rival for MB CLS but the X6 doesn’t really look like a good rival for but itll do.. they do have too many cars and the new ones coming out are little too much. X1 X2 and all those other vehicles waste of money and steel.. there u are right. they should just stick to the classics

 
 
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