MINI to be Profitable Sooner than Expected

Sections: In the Press | Sales Jan 11th, 2005 11 Comments

As the automotive press has reported previously, BMW invested so much in the new MINI that they didn't actually expect to turn a profit within the first production cycle of the car. This was a huge gamble on BMWs part and it led to talk of the next generation MINI possibly losing some of the current car's more expensive components in the quest for quicker profits. While that may yet happen to some small degree it would seem that success of the current car (and the possibility of profit sooner rather than later) has assured the next MINI will keep the same performance DNA that we've come to love.

This excerpt comes from a recent news story via Bloomberg that's actually quoting a story from Handelsblatt:

“Chances are good” that the unit of Munich-based BMW will pay off development costs and become profitable with the first set of vehicles, the German newspaper quoted Chief Financial Officer Stefan Krause as saying. Analysts had expected the Mini to remain unprofitable until revised models go on sale in 2007, Handelsblatt reported.

The division's 2004 production of 184,000 cars beat the company's initial forecast of 100,000 units a year, the German newspaper said in a preview of an article in tomorrow's edition. At the same time, BMW will expand the Mini's Oxford, England, factory only “carefully,” to ensure that extra capacity meets demand, the newspaper said.

You can read the original article (provided you read German) here.

Written By: MF Reader

gmini

keep em comin!
Allan

screw profit, give us the goodies for cheapo prices
dgszweda

You state that we are more assured now that the car will keep the performance DNA that we have come to love.

I don't think the performance DNA has ever been in question. Every release from BMW has made very sure that the performance aspects of the car (i.e. go-kart handling, quick response….) would not be touched, even with the newly redesigned engine. They have never said they will ever touch that aspect of the car.

What has come into question in the past, is either the quality of some of the components that will be used (mostly from the interior), and manufacturing techniques, all in a measure to cut costs. Some aspects of manufacturing are very costly with no real added benefit (i.e. the hood design).

So I think it is not so much the Performance DNA that is going to be saved, but more that cost cutting will not be as central of a theme in the development and manufacturer of this vehicle.
http://motoringfile.com Gabe

Logically I would think that too… but actually there were real concerns 3-4 years ago that BMW would be using not only a codeveloped engine (which has since turned out to be a good thing) but an entire chassis from Peugeot: motoringfile.com/2003/04/01/TheNextMINIToHaveAPeugeotCitreonChassis.

The other main piece that was rumored to be dropped in an effort to save space and money was the z-link rear suspension. Obviously an integral part of the MINI's performance DNA.
Brian

Hey dgszweda…. BUUUURRRNNNNNNN!! :o)
Iain
Two things:
1. BMW is selling Minis with more accessories than expected – this adds considerably to the profit and hence they are getting a faster payback.
2. I was talking with my local BMW the otehr day. They are lobbying for a Mini dealership (the nearest Mini dealer is 70 miles from here). Mini has told them they will have another 5 dealers in the US once they have expanded the Oxford plant and hence increased capacity. Until then, no more dealers will be added, since to do so would mean reducing the allottment to existing dealers.
dgszweda

BUUUUURRNNNN! Ouch! Man you guys are mean:)

Gabe, you brought up some good points. But in reality the ones that you brought up were rumors that were never substantiated. These rumors in my opinion were far fetched, and never panned out or reported by any other news organization. I think there is a difference between really early rumors (2002-2003) and what is more current and more substantiated. Besides, these were all rumors. All official communication from BMW has never remotely hinted at this. And as we all know the rumors documented in publications can be quite a bit far from reality.
mcswrks

We are getting a mini dealer in Birmingham-Tom Williams Mini. An interesting thing, I am seeing more and more dealers become “seperate” dealers from BMW, then just sold on the same lot. This one will be two. Mean anything?
http://www.northamericanmotoring.com David Bunting

MINIUSA has had a strong desire since the beginning to get MINI into seperate dealerships. When fully realized, MINIUSA's vision would have MINI dealers being totally self contained (sales, service, and parts).
michael Boice

It's all a rumor until it happens.

By the way, I love the bonnet just the way it is, unconventional, as the entire theme should remain. I love the handling, I love the Mini, the way it is. Maybe I'll just buy another one and drive it into a big ol jar of formaldehyde.
Eric

mcswrks, yes, like David pointed out, MINIUSA is trying, with the support of BMW-AG, to become a seperate entity. It would relieve a lot of the stress on my local BMW dealer's service crew, that's for sure!!! ;-)

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