By Max Bernhard 
 

BMW AG (BMW.XE) shares fell Wednesday after the luxury car maker said it expects a significant decline in profits for the year ahead and announced multibillion-dollar cost savings.

BMW shares traded 4.7% lower at 72.14 euros at 1010 GMT.

The German company said it is facing significantly higher costs to comply with stricter emissions regulation. At the same time, BMW said it will continue to invest heavily into electric and self-driving cars, as well as other new technologies. Earnings will also be weighed down by exchange-rate effects, higher raw-materials prices and global trade tensions, it said.

BMW said it expects the closely-watched operating profit margin in its auto segment to be between 6% and 8%, below its long-term goal of 8% to 10%.

In addition to the headwinds, "the fact that some positive valuation effects recorded in 2018 will not be repeated in 2019 will result in a significant decline in the group's financial result. Group profit before tax is therefore also expected to be well below the previous year's level," it said.

BMW said it wants to save 12 billion euros ($13.62 billion) over the next three years through efficiency and cost improvement, including from digitalization. The company plans to keep its workforce at the previous year's level, but added that higher natural attrition, caused by demographic factors, should help increase efficiency. No forced redundancies are planned, Chief Financial Officer Nicolas Peter said.

BMW also wants to reduce complexity by eliminating up to half of its drive train variants, and also plans to cut development costs for its vehicles.

Write to Max Bernhard at max.bernhard@dowjones.com; @mxbernhard

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(END) Dow Jones Newswires

March 20, 2019 06:50 ET (10:50 GMT)