FRANKFURT -- 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 decline in 2018 operating profit due to higher investments in electric vehicles and currency headwinds.
"We expect strong headwinds to continue to effect the entire sector in 2019," BMW 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 it builds and markets.
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 ($10.33 billion), 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 EVs and a price war triggered by new emissions tests weighed on profit.
BMW cut its proposed dividend by 50 cents to 3.50 euros per common share.
BMW Group said it will also reorganize its board of management "to create a new leaner, future-oriented structure."
Beginning April1, the BMW, Mini and Rolls-Royce brands will become part of a new central sales division headed by Pieter Nota, the BMW Group's board member responsible for sales at the BMW brand.
BMW said Nota will also retain responsibility for additional functions including brand and product management and after sales.
“We are restructuring our divisions to give us the best possible foundation for the future. It sends out a clear signal that our organization is lean and efficient throughout the company,” BMW Group Chairman Harald Kruger said a statement.
BMW said Peter Schwarzenbauer, head of Mini, Rolls-Royce, BMW Motorrad, customer engagement and digital business innovation for the BMW Group, will leave the post at the end of March but remain a board member until October. He will promote the company’s strategic focus on electromobility until October, BMW said, when he plans to leave the company after turning 60.