Reuters/Frankfurt
German luxury auto maker BMW plans a new round of cost cuts to achieve annual savings of between 3 to 4 billion ($4-5.4 billion), Germany's Manager Magazin reported on Wednesday, citing company sources.
Despite record sales and earnings in 2013, Chief Executive Norbert Reithofer is disappointed with the cost structures at Mini and the smaller BMW models, the magazine said.
BMW declined to comment on the report but said, "Generally speaking we are continually watching our costs, and seek to maintain and enhance our international competitiveness. We seek to achieve a sustainable EBIT margin of between 8 and 10 percent, our strategy is based on this profit target."
The world's largest luxury carmaker has been investing heavily in new models and alternative powertrains for hybrid and electric cars to stay ahead of rivals Audi and Mercedes.
For 2014 the auto maker wants to lower spending on research and development and focus on efficiency in an effort to achieve a "significant rise" in pretax profit.
The cost of investing in new cars, including a new generation of the Mini, as well as a raft of smaller models such as the 2-series, lowered BMW's automotive EBIT margin to 9.4 percent in 2013, from 10.8 percent in the year-earlier period.
In the first quarter BMW's automotive EBIT margin, the best gauge to compare profitability with peers, was 9.5 percent, higher than the 7 percent achieved by rival Mercedes-Benz Cars but short of the 10.1 percent achieved by Audi.
Earlier this month, the Munich-based maker of BMW, Rolls-Royce and Mini cars said it was reviewing the cost structure at individual factories as part of a process of deciding whether they were still competitive.
BMW's renewed focus on costs comes after key rival Daimler, which makes Mercedes-Benz cars, said in April it would seek more cost cuts to narrow its profitability gap with peers.