German carmaker BMW will deepen cost cuts after higher development expenses contributed to a 27% drop in third-quarter operating profit, falling short of analyst expectations, with currency effects also taking a toll. Investments to develop electric and self-driving cars, as well as spending to boost production of new X5, X7 and 8-series luxury models, weighed on earnings when tariffs between China and the US and a price war in Europe were already eroding margins. BMW said capital spending would rise again in the fourth quarter owing to the start of production for a new version of its BMW 3 series. “Additional measures will be needed to support our profitability targets,” CFO Nicolas Peter said in a call to discuss earnings. He gave no details. “Despite the difficult conditions, we are still targeting a free cash flow of €3bn for the full year,” Peter said. “In the light of the current challenges, this will not be an easy task.” BMW’s earnings before interest and taxes of €1.75bn ca...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now