JD Powers has a fantastic interview with MINIUSA General Manager Jack Pitney that is a good read for any MINI owner. It's also great for those of you out there that would like to know more about one of the main decision makers behind MINIUSA. Mr. Pitney touches on everything from the introduction of the car in the US to what will continue to make the MINI a successful brand in the years ahead. Here's an excerpt:
“When we started this process, less than 1% of America had any idea what Mini was. There were people who bought the car when it was last sold in the United States in 1967, or they had been stationed in the military overseas. Mini was the most popular car ever introduced-5.4 million of these tiny little boxes were sold. But only 10,000 were sold here, and that was between 1960 and 1967. It had been 35 years since it was last sold in the U.S. So there wasn’t a lot of brand equity for us to build on.
So, we had the introduction of a new brand and also the creation of a new segment-I underscore this point because in hindsight people look at this and say, ‘You knew you had it.’ No, we had a lot of sleepless nights on this one. Look at the market when we launched-light-duty trucks were outselling passenger cars, the SUV segment was the fastest growing segment in the marketplace. And what was happening to SUVs? They were getting bigger. Here we were getting ready to introduce the smallest car in America-smaller than the Geo Metro. A lot of people look at the Mini and don’t realize that because it is as wide as the BMW 3 Series, but it is really short.
This was a bit of a risk for us. But we knew that in Europe, this was really an icon. It stood for so much more than just a car. It was more of a lifestyle statement. The Queen of England had a Mini and the butcher has a Mini. We thought if we could take that same iconic stature of the Mini that was enjoyed in Europe and to a lesser extent in Asia and bring that to the United States, it would be a golden opportunity for us, similar to other brands like Harley Davison-when you buy a Harley, you’re not just buying a motorcycle, you’re buying a lifestyle. We thought this was a great opportunity for Mini.
We’re very serious about this, because we think it is important not just to introduce Mini as a brand, but to get it to that iconic status it enjoyed elsewhere in the world. Icons are classless and they appeal to all kinds of different people. They are not fads or trendy and they tend to have a broad appeal. If you look at the typical model introduced in the market, it enjoys acceptance and then it peaks and what happens? Competitors come into the market and sales decline. A trend or faddish product drops like a stone. For Mini and icons, they tend to go up and find their level. That is really important to us. If we can keep a consistent level of sales for Mini, it will help our profitability and it will help our dealers’ profitability.
We asked ourselves two questions: Does this Mini have what it takes to become an icon? What are those characteristics that are needed to become an icon? We boiled it down to six characteristics-these are not exclusive to the automotive business. The first is a defining signature look. When we researched Mini, we showed just a silhouette of the car. Nobody knew what it was. It could be a Honda, a Toyota or anything, but when you added the contrasting roof, the mirror caps and the wheels, suddenly it was a Mini.
The implication for us was that so few people knew what a Mini was in the first place that we really needed to visually communicate what it is through this signature look. The second characteristic is the ability to elicit an emotional or physical reaction. Iconic products and brands tend to do that and with the Mini, we are pleased to say this is a smile-generating machine. It has its own bulldog-like face and you can’t help but smile when you drive this car, because it is so much fun. So we felt pretty good about that.
The third characteristic is the ability to transcend and take on a characteristic from outside the category. Minis historically have anthropomorphized into so much more than the product itself. It was like the Three Dog Bakery idea-it’s not just a product but a member of the family.”
You can read the entire article here.
Analysis:
This is an article that every MINI owners should read. It gives you a solid understanding of exactly what MINIUSA has accomplished over the past year and a half. My hats off to those at BMWUSA who initially fought for the MINI to come to the US and then to the people at MINIUSA for continuing to support such a fantastic product so well.
<p>Also from the article…</p>
<p>“We don’t have a dealer that sold less than 300 cars over a 12-month period. On average, they sold about 425. They all had to generate a pro forma that demonstrated profitability at 300 cars a year. On average, a dealer invested one-half million dollars to get Mini, between facilities and training and whatnot. And on average, that dealer received $1.2 million in gross profit in 2002 alone when we were on sale for nine months.”</p>
<p>wow… how's that for profit?</p>
<p>Looks like <a href="https://www.motoringfile.com/?Y=2003&M=07&D=06&TitleID=DealersMakeMoneyOnTheMINIInvestment">this bit of news</a> from awhile back was on the money after all.</p>
<p>$3000 to $4000 gross profit per
car, dpending on how you
annualize these rates. Not bad.</p>
<p>Very interesting reading, thanks for posting a link to this interview! I was puzzled by Pitney's comment that the original Mini was the most popular car ever at introduced at over 5 millions sold? How about the VW bug with well over 20 million sold? Many cars sold over 5 million, even the MGB did. Another interesting tidbit was Pitney's lauding of the BMW 3-series electrical system in the MINI. IMHO, this is one of the weakest elements in the MINI, not a strong point. All that said, it is a fantastic car, and it seems like they are well along the way of their goal of making the new MINI an icon. They designe dthe car just right for that purpose, and their marketing in that direction is nothing short of brilliant!
It's also great to hear that Pitney really seems to be enjoying himself in his job, with the MINI. Cool Beans!</p>
<p>Yeah I have to think he was misquoted in some way on that claim. I can't imagine any auto exec making a mistake like that.</p>
<p>Regarding the 3 series (E46) electrical system I'd have to say that I'm not aware of any issues the MINI has had with it. The software problems that everyone seems to be having, to my knowledge, are engine management software issues. For those problem you'll want to actually blame another German company, Siemens, who is the creator and owner of the proprietary software.</p>
<p>How have we done? Really well! We said we would sell 20,000 units the first year and we sold 25,000. We don’t have a dealer that sold less than 300 cars over a 12-month period. On average, they sold about 425. They all had to generate a pro forma that demonstrated profitability at 300 cars a year. On average, a dealer invested one-half million dollars to get Mini, between facilities and training and whatnot. And on average, that dealer received $1.2 million in gross profit in 2002 alone when we were on sale for nine months.</p>
<hr />
<p>THAT translates into $2823.53 profit per car before expenses….hmmmmmm</p>
<p>I'm sure some numbers were jumbled a bit in the quotes! 😉 That being said the 1.2 million number is the significant one. I doubt if MINI could have found many dealers without this kind of incentive. Investment even without a dedicated floorspace would have been a tough sell to the dealers if the the profit percentage was only minimal. Even without this requirement, few dealers would probably have taken the plunge because of the inherent risk of failure with NO return. Edsels, anyone? GM, Chrysler, and the others have been taking a bath with the cash-back BS, and losing money. Instead, BMW provided the MINI dealers with a shot at a viable new property with extreme potential, and the chance to be a stable dealership for at least the first coupla years. Margins aside, regardless of how large a percentage they get, this was one HUGE crap-shoot. Nobody could tell in advance how well the MINI would do, and BMW should really be looked at in awe, 'cause this was a big gamble. Kudos to Pitney, IMHO.
And anyone who never had to deal with Lucas, Prince of Darkness, should thank their lucky stars! It's software, not bayonet plugs and 2 fuses per car, this time. HeHe!</p>
<pre><code> BCNU,
Rob in Dago
</code></pre>