Sections: Sales Sep 22nd, 2008 
Automotive News is reporting that BMW North America and MINI USA will be reducing it’s staff by around 100 employees and turning down 44,000 cars (it’s not clear how many if any of that will be MINIs) that were allocated for the North American market. Here’s an excerpt from the article:
O’Donnell has ordered his department heads to look at cutting costs. They were to have reported back to him by the end of last week. Marketing will be a key area for slashing expenses. O’Donnell said it is wrong “to push in a market that is declining.”
O’Donnell expects BMW Group — which includes Rolls-Royce and Mini — to suffer a U.S. sales decline of 10 percent this year.
Overall U.S. sales of BMW, Mini and Rolls-Royce totaled 336,265 units last year. Within that total, the BMW brand accounted for 293,795 units.
“We’ll be down maybe a little bit less than the marketplace, about 10 percent down — which I am fine with,” O’Donnell said. “I’d rather sell fewer cars than blow them out the door without any profit.”
Soft BMW brand sales account for the group’s overall downturn. O’Donnell expects Mini sales to approach 50,000 units this year, up from 42,045 in 2007.
His reasoning “it’s wrong to (advertise) in a market that is declining….” Not sure.
The general wisdom of advertising is to advertise the same, or more, in a down market, because your competitors won’t, and you’ll gain advantage.
More likely for MINI, they can’t make cars fast enough so why advertise what you can’t sell off the lot. For BMW, it’s irrational desire that sells for them, for most of their buyers, and that is a hard sell right now.
This is confusing to me, after seeing how sales are up consistently (at least for MINI), as reported by MotoringFile for the past year or longer…
Demand is seemingly at an all-time-high for MINI, and with increased sales, I’M NOT GETTING IT…
If your factory is at capacity, and the dealers can’t keep the cars in stock, then sure, cut marketing. No sense building up demand you can’t satisfy.
I think the decrease in sales is going to come on the BMW side of the business, not the Mini side. You can see why the imperative to expand the diversity of the small cars offered under the Mini brand as posted in the preceding entry.
Greg, don’t forget that if people are losing their jobs and have no money to pay for that mortgage, health insurance and put food on the table, a new car purchase is the last thing in people’s minds.
Doesn’t take a rocket scientist or financial guru to see how screwed up our country really is.
BMW is doing the right thing. They are willing to reject product, lower sales forecasts than risking losing inventory at fire sale prices.
Everyone is hurting.
Well florida where you are, more so than elsewhere. Texas is positively rosy due to oil prices. Not that there is any great news on the horizon, but most of the chips have fallen now and there’s not a single independent securities house standing. So what else may fold? What’s left.
Sad to see this, yet rather see them do this than risk their entire business. First and foremost my well wishes and best of luck to any of the employee’s being let go.
Times are getting tougher no doubt, yet I have to say all the doom and gloom that the media portrays everyday is a little more dramatic than factual. Have no doubt that we better get busy working on the issues before things get ugly.
Maybe I am a oddball here but my family is actually doing pretty good these days. Not doing anything much different than I did many years ago. I know a lot of people are in nastier places but a great many of these are pretty responsible for the situation they find themselves in though.
I’m wondering about the South Carolina plant…all those X3, x5, x6…who are going to buy them? I can’t believe they will be at full production there unless Europe can use them. Of course they can be made here cheaper than Europe.
Don’t forget, MINI’s hedge fund will be gone soon and the cost of the Euro will skyrocket the price of a MINI soon thereafter.
C4, are you addressing me? I haven’t participated here….yet.
Times are not as bad as it would seem folks. Don’t belive everything you hear on the news. They start their share of the anxiety.
Funny how unemployment went up shortly after minimum wage went up…..er, duh.
Two years ago gas was $2.19 a gallon. Unemployment was under 4%. The stock market was booming. GNP grew every quarter.
And then what happened…….do I really have to remind everyone what happened November of 2006?
Don’t like it? Look in the mirror for the problem. Don’t get it? Then I fear for the rest of us come November 2008.
I’m out. Whine away everyone.
MINI’s hedge fund will be gone soon and the cost of the Euro will skyrocket the price of a MINI soon thereafter.
When is this supposed to happen? Last I heard, it was going to go into affect with the 2009 models. We saw an increase of $750 per car, but DSC became standard.
Thank you Brad. You are 100% correct. We can choose not to participate in current woe but to work harder.
No greg - I’m a greg also, and C4 was addressing me. As for Nov06 congress went from Repub majority to Dem majority. And if you think thats responsible for higher gas prices, unemployment, and trouble in the market then I hope you enjoy this nov even more.
Interesting that Mini does promote their vehicles as much and as creatively as they do when they would fly off the lot anyway without the expenditure. I’m not sure why they even need a sales staff (affectionately know as Motoring Advisors) when a order taking machine at each location may do similar to the dvd rental vending machine located outside of where my local video store used to be.
They probably could sell strickly on line without showrooms as well. I personally enjoy the human aspect and the accompaning service. But like the machines we all deal with when calling most institutions now it could be the future.
Ah, I see now also Greg aka lavardera. Nice to see you connected the dots. I was expecting more outrage but then most of those responsible can’t remember anything longer than a slogan on a bumper sticker.
November will be interesting. Integrity vs slickness, heroism vs epidermis.
“November will be interesting. Integrity vs slickness, heroism vs epidermis.” Wow, so is Motoringfile now a political blog, too?
Thanks Gabe for nipping that one, politics really shouldn’t be point of discussion here.
It is hard to have a discussion around the economy and the environment without it being so.
I agree with “also Greg”. And have stated many times on this forum that these issues should be left off the site. Yet they continue to appear drawing posts that demand equal time. I’m all for a truce as long as economy and enviroment remains absent from MF.
It’s the insidious way these topics creep in here that sets me off. There are other outlets for that. I come here to read about my car. I have never launched the initial volley and would be happy not having to respond in kind again.
Sales patterns of cars are influenced by the economy. The design of cars is influenced by the environment. You can’t talk around these without touching on politics. Whether or not that develops into a divisive discussion is up to all of us.
But Greg, you have to accept that you raised the bar in your comment. I don’t know what you consider insidious creep, but I only responded in kind to your remarks which I considered very direct.
The fact that the economy is bad right now is not disputable. The fact the auto industry is compelled to design cars to respond to environmental concerns again is not disputable. If those facts confront beliefs of your world view, then its your problem. You can’t treat a discussion of them as an “insidious creep”.
BMW are cutting back on staff worldwide so its not just a USA thing and nothing to do with your current Wall Street crisis.
Loyal employees are treated as job card numbers now and disposable resource.
It is hard to have a discussion around the economy and the environment without it being so.
It’s also hard to talk about anything automotive without the economy and/or environment.
Hope they keep the good ones!
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