You might want to sit down for this.
BMW’s number crunchers have recently come to certain conclusions enthusiasts will not like. The German automaker’s share prices in Europe alone have fallen by 47 percent since 2015 and last year overall earnings dropped by 22 percent. The return on investment also fell, from 9.2 percent to 7.2 percent. For 2019, there are already warnings of another decline between 4.5 and 6.5 percent. No wonder why BMW’s management board recently replaced its CEO. Major changes are needed, and Harald Krueger wasn’t the guy to make them happen. His successor as CEO, Oliver Zipse, has a huge task ahead of him.
Along with the ongoing US and China tariff dispute and other global issues it has no control over, BMW must make additional cuts because it needs the money elsewhere, specifically for investments in electrification and mobility technologies. It also must cut fleet-emissions by 25 percent by 2021. Where could that money come from? By eliminating some of its hottest models.
Automobile Magazine has learned some troubling news out of Munich. Basically, those number crunchers concluded BMW has trouble making money on vehicles that cost less than $40,000. This means the rear-wheel-drive 1 Series, 2 Series, and lower trim 3 Series do literally nothing to help towards the bottom line. That said, BMW has created a list of so-called "doomed models” that are not expected to be replaced once their current production life cycles come to an end.
So far, these models are the three-door 1 Series, 2 Series Gran Tourer (neither of which are sold in the US), 3 Series GT, 2 Series convertible, standard wheelbase 7 Series, Z4, and – gulp! – the 8 Series coupe and convertible. The 6 Series Gran Turismo will also meet its end. The 8 Series Gran Coupe and the long-wheelbase 7 Series, however, will stick around. Even the still fairly new X2 is living on borrowed time. But the fact that the new 8 Series coupe and cabrio already have a date with the automotive axe is quite telling.
The i3 will also be dropped by 2022, but will be replaced by an all-new EV loosely based on the X1. The i8, meanwhile, will be redesigned for 2022 and could be renamed i12. For now, none of this appears to be official, but given its current financial state, BMW must make some painful cuts for its long-term security.