Why Are MINI USA Sales Are Dropping?

Fact: Since 2008 MINI USA’s share of total MINI sales has steadily decreased. Even the raw numbers (courtesy of reader Nick Dawson) are pretty interesting:

TOTAL ANNUAL MINI GLOBAL SALES vs TOTAL ANNUAL MINI USA SALES

  • 2008: 232,425 vs 54,077 = 23.27%
  • 2015: 338,466 vs 58,514 = 17.29%
  • 2016: 174,898 vs 25,144 = 14.38% (6 Months YTD)

R60_Countryman_5265

Why? In talking with MINI executives last week at MTTS there’s a couple of reasons that they see as the core cause.

1. Lack of Low Cost Leases. MINI (and parent company BMW) have made the strategic decision to not go after low cost leases like many other automakers. This has put MINI at a unit sold disadvantage but has also allowed them to focus more on profit than sheer numbers. This is one that we’re honestly not totally sold on. But given that Mazda’s in a similar predicament it seems plausible.

F56_NYC_587

2. Gas Prices. When gas prices decrease the average US consumer buys larger cars. That’s a statistic that has been true for 50 years and continues (perhaps unsurprisingly) in 2016. This is evident in MINI sales as well with the Clubman and the six year old Countryman selling much better than expected.

From our perspective we would agree with both points – especially the latter. But these aren’t the only reasons we believe sales are down.

Screen Shot 2016-07-27 at 7.19.40 AM

3. Marketing. MINI’s Marketing platform isn’t coherent to most Americans. On one hand you have the brand attempting to associate a car built in a factory with local artisanal goods is tough. And trying to connect MINI as a product with handmade goods is even harder when you don’t actually tell that story. To pull that type of marketing message off you need to nail every single aspect of the story in every possible touchpoint. As it stands MINI isn’t effectively succeeding with that story anywhere. And worse, marketing itself seems to be absent outside of MINI dealers.

Personally I haven’t seen a shred of marketing (outside of targeted 300×250 banner ads with financing deals) from the brand since the Super Bowl commercial. Interesting I’m told that MINI USA is advertising on TV more than ever. Given that I and much of the demographic that MINI is aiming for doesn’t spend much time watching TV this also seems like a miss.

It gets worse. What is on TV is the Defy Labels campaign who’s core message is one of being defiant and almost angry. To the casual viewer (i.e. the non-MINI owners) it’s a message that makes the brand sound like it’s trying to make up for something or overcome negative connotations. Not only is it not a great first impression but it makes no effort to tie back to the parallel brand message mentioned above.

F54_NYC_199

For many owners MINIUSA’s current marketing strategy is particularly hard to stomach as the brand is so valuable and the products so interesting. Ask owners and they’ll tell you that creating a compelling story about these cars isn’t particularly hard. It all begs the question; should MINI have a more concerted effort to reach its base audience with a different more product driven message? Perhaps one that’s off of TV and lies purely in digital (and on sites like this one)?

The final issue is one that we recently spoke about on Whiteroofradio. It’s a topic many of you are familiar with and one that MINI USA doesn’t like to mention.

r56 vs r50

4. Reliability (or lack there of) is hurting MINI’s image. Like many of you, we’ve almost loss count of the class-action lawsuits and recalls that have happened over the years. The lack of parts for the R50/R53 MINIs (try to find a new replacement supercharger for instance) and the host of fairly common issues with most older MINIs is beginning to hurt resale values. Simply put long time owners who are stung by poor resale values become former owners.

The one thing MINI has going for it is product. In our opinion the current range is the best MINI has ever had. That’s not to say there isn’t room for improvement (stripped down $24k Cooper S anyone?). But by and large it’s MINI’s current product range that is keeping sales from going lower. And with an all new Countryman around the corner there’s no reason to believe MINI is in dire straits.

As MTTS 2016 proved (once again) MINI USA has thousands of hardcore fans. And that’s just a fraction of what we would call the MINI fan base. If MINI USA can tackle some of the issues above (the ones in their control) we believe 2017 could be a banner year.

  • RakSiam

    I think I probably said this the last time this subject came up…but add #5 – lack of value. As other automakers have gotten their act together they sell small cars with even more technology and better fuel economy at much lower prices. Add that to the reliability issues (not something I ever experienced though) and you don’t have much of a surprise. Most Americans want larger cars in general. I ditched my MINI Coupe because it had such a harsh ride (roads are crumbling) and so much rattling from the boot that it drove me insane. I also wanted newer tech (Android Auto). So I bought a 2017 Hyundai Elantra. Sure it’s maybe not as “fun to drive” but it’s fun enough. And more comfortable. Has better tech (Android Auto and Carplay plus Hyundai’s own infotainment system which is pretty good), all the available safety tech including radar cruise control, automatic emergency braking, blind spot monitoring, rear cross traffic alert, etc. And it’s got a 10 year powertrain warranty. And even though it’s a good bit larger it gets better mileage than my MINIs got (and uses Regular gas). While MINIs might have decent base prices for a stripped down model, once you start adding some options the price jumps very fast. I drove the new Clubby and liked it quite a bit. But by the time I started kitting it out the price quickly jumped to around $33K. My fully loaded Elantra had a list price of a bit over $27K but I paid about $25.5. I suppose it will depreciate faster, but I plan to hang onto it for quite a while so the overall value is way better. If MINI wants to stick to their premium pricing they’re going to need to offer a lot more for the money.

  • SS56

    Younger people tend buy small cars, that is usually due to economics, small cars are cheaper, cheaper to buy, to own and to run. Mini is a small car that isn’t a value, it’s a BMW now more than ever without the Roundel on the front and its less reliable than its Japanese, Korean and some American competition (I leave out FCA).

    As you said Americans like larger vehicles especially when gas is cheap, when you can get a crossover for the same or less money than a sedan or wagon that’s what we buy.

    My wife just got her Clubman S, she always wanted a Mini because they are cute (I’m betting the majority of Mini buyers are 35-55 year old women). I like Minis but I would have gotten something else for a number of reasons, those being value, reliability, performance and that since they are owned by BMW I couldn’t trade-in my car losing $1,800 in taxes (takata airbag of which they have no parts).

  • Jim C

    The car has become passe’. When the new Mini came out there was a buzz and excitement about it.. That buzz and excitement has been gone for many years.

    • Aurel

      I would agree with this. As someone who jumped and bought one in 2003 when they were the IT car. The cool factor is gone and the aforementioned dreadful marketing for the new generation models is the pits. They should fire their entire marketing team, now! There is also the competition and value factor mentioned as well. The Jeep Renegade is killing it in sales. Fun to drive, lots of configuration options, great value and made in Italy with real off road capability. $25k buys you a nicely loaded one. Why would anyone buy a Countryman?

      • LuckyDevil

        Why would anyone buy the rebodied 500x Renagade that is SLOW, Not Fun & gets horrible reviews? Only because they are cheap & they don’t know any better.

  • Aurel

    Speaking of the Countryman, when is the big reveal?

  • MINI Canada and many other single jurisdictions are killing it so the issue appears to be a US-only problem. When you look at market trends, all small cars are getting killed (some to the point of being cancelled) and build capacity shifted over to CUV/SUV.

  • brt356

    Good article on all points Gabe. While reliability hasn’t been an issue with the 3 Minis we’ve owned, I agree that that perception is adversely affecting resale values and, let’s face it, we all eventually sale our cars. The other point you made about marketing was also spot on. Our first Mini was a 2003 MCS. Back then, what little marketing there was, was all about fun. The current “campaign” pegs us owners as elitist nonconformists snobs with a vague defensive attitude. Let’s go back to fun. Lastly, I’ve said this before and it’s my “5” point. Competition. For instance, there are many excellent alternatives at the price point of a nicely optioned JCW. e.g., BMW 2 series, Focus RS, Mercedes CLA/GLA, VW GTI/R, Audi A3, Subaru WRX/STI, to name a few.

  • Short response:

    None of the reasons mentioned in the article address why I’ve bought my last MINI. From my perspective, not enough of the MINI experience that I bought into remains in the current fleet.

    Expanded response:

    Of course, yes, an argument can be made against every point I make below, but the following characteristics have been stretched and diluted to the point where my interest in buying a current MINI offering has been exhausted.

    I was initially drawn to my 2006 MINI because of its:

    Diminutive size. Ideally, for me, it would have been a bit smaller, but it was small enough. I don’t want or need a larger MINI.

    Sporty handling. The MINIs inherently taught handling was enhanced by the reasonably priced Sport suspension option I have on mine. When i bought my MINI I didn’t know enough about MINI to understand the JCW difference, but the Sport Package and performance tires has never left me feeling like I need much more. It felt to me like an excellent step up from the sporty VWs I grew up driving and the Audi i’d been driving when I bought the MINI. Despite what MINI says about go-kart handling, MINI’s gone the route VW did and now offers a much softer ride experience.

    Practicality. Despite its comparatively small footprint, early MINIs are known to have a deceivingly spacious interior, fold down rear seats, and a large-ish boot opening. I have a Thule rack for my bikes, etc, and a Thule cargo box. This gets me pretty much to the cargo equivalent of a much larger vehicle when I need the space. Another way of putting this is that I never feel like I need a larger MINI.

    Premium-ish look and feel. I have what I believe to be a fully-loaded MINI. Lounge leather, Harmon-Kardon sound, automatic climate, Xenons, Panoramic sunroof, etc. This package in total gave me the feeling that I was getting enough of the experience I’d had with the Audi, for example, but in a tiny package and at much lower price.

    Genuinely quirky. Search for MINI’s Unofficial Owner’s Manual. There’s enough that’s actually intentionally different about this car to give it an authentic personality. MINI’s early identity seemed to borrow the best of Fahrvergnügen and then turned the dial up to 11.

    MINI’s early marketing also struck a cord with me. It seemed to adhere to a “just enough is more” approach. MINI abandoned this entirely with examples such as the Cram It In The Boot campaign.

    When people ask me about my MINI I say without hesitation that I’ve never had a better ownership experience. I’ve owned and driven far more expensive cars, and I’ve had dealership experiences that match MINI’s, but I’ve never had a better overall ownership experience. I couldn’t ask more from an everyday car that has proven to be extremely reliable, economical and is a blast to drive summer and winter.

    • Jan Wojcik

      I would offer that the uniqueness of the MINI has been lost in translation as all of the other car makers have moved towards having niche small cars in their arsenal. Many nice small cars were forbidden fruit, while now, the globalization of the car industry has led to the offering of many alternatives to the MINI. My wife is on her third MCS and all previous one were traded in due to mechanical issues out of warranty. As the MINI has become more mainstream and larger, it has also lost it’s uniqueness and many folks have heard that they are expensive to keep running, especially out of warranty. MINI has become an expensive way of motoring and the alternatives have become so much more appealing.

  • oldsbear

    The uni

  • Jim

    I was recently in the market for a new car and I was planning on buying a MINI…but after looking at the competition, it just didn’t make sense. I absolutely love my Countryman S All4 that I’ve owned for a few years and while it was in the shop (it hasn’t been the most reliable car), MINI loaned me a new Cooper S Hardtop. Me and my wife really enjoyed driving that car so it became 1st on the list. The problem was…even though the Cooper S Hardtop starts around 24K, all the Cooper S Hardtops on MINI lots seem to be at least 30K. Even the justas on the lots were almost 30K. I ended up buying a GTI. My GTI had 3K worth of extras (the DSG and Performance Pack), and I still payed less than most of the justas I looked at. That’s just crazy. The base GTI also comes standard with things like heated seats and CAR PLAY. MINI really needs Car Play. And I can’t believe an alarm system isn’t standard on a MINI. Is there any other car manufacturer that doesn’t include an alarm system as standard now?

    I think the main reason for the drop in sales (like others have said) is due to the bang for the buck. MINI wants you to believe they are a premium product but I don’t think people are buying that. I absolutely love MINIs and I hope to own another one some day…but that probably won’t happen unless I become rich and don’t mind throwing 45K on a MINI…or…they become appropriately priced.

    Also, looks are a huge deal to people and MINI should at least include the 17″ Black Cosmos Spoke wheels on their hardtops or come up with a better 16″ design. Having those ridiculous 16″ wheels on most MINIs is in a way, bad marketing…because that’s what everybody sees.

  • Patrick W

    What’s missing in this analysis is whether MINI’s worldwide sales have been increasing because they have been opening new markets, or is it the same old markets that, other than the U.S., have been slowly improving their year by year numbers?

    If we look at raw numbers U.S. sales actually increased from 2008 to 2015.

    Assuming that the numbers do add up to a flatter U.S. market, you’d have to point to increased competition from Fiat 500’s and other small, quirky, European or Euro-styled cars that are peeling off buyers who are primarily interested in having something with a big personality (rather than a BMW-engineered sport compact).

    Secondly as others have mentioned, while the new designs aren’t bad, they don’t make the heart race quite as fast as R53’s and R56’s. The new Clubman appears to be a wonderfully practical vehicle but has almost none of the Old World charm of the outgoing model.

    I think the marketing should focus on the British roots of the MINI. I think the whole political mood in the air is such that emphasizing that the MINi isn’t a generic, corporate, multinational brand but is very British would be beneficial. (Of course it’s not entirely true but that’s why they call it advertising.)

    The lack of dealerships over large swaths of Middle America and the Mountain West cannot be of great help is helping the brand grow.

    • We looked at that in an earlier analysis. 2016 hasn’t had new markets drive growth nearly as much as years past.

  • -=gRaY rAvEn=-

    Coming from someone who loved working for MINI and at BMW for 7 years, these are my observations and reason for this….

    1) BMW…..MINI was never meant to be a feeder brand for BMW, yet that’s how they are marketing the current models. Defy Labels? The very concept of that media strategy suggests that the car has “labels” or there is something wrong with the car….in effect, a label of its own…..So what demographics of buyer were they trying to bring in ? Surely not anyone who waves at the sight of an on coming MINI. ?

    2) BMW…..They continually promote executives from within BMW to senior management positions in MINI USA…..( VP Jim McDowell being the exception ) MINI has been a brand of its own since 2002. Are there NO persons qualified who have the MINI spirit serving positions in MINI for last 15 years who have proven themselves, capeable of running MINI USA ? Why do I need to keep repeating this….MINI is NOT A BMW ! By not promoting from within, you will only carry over BMW philosphy to the brand….and when that is apples and oranges, well this is what you get.?

    3) BMW…..They handled ALL their recalls for this brand same as they did for BMW. Last minute, last bell and only when pushed. For many MINI owners, it wasnt just car, it was a member of the family. It was like getting Obama Care for your MINI….?

    4) BMW…..They had no planned maintenance for the CVT transmissions. There is NO SUCH THING AS MAGIC MINI FLUID BMW ! All CVT’s ( every transmission for that matter ) are required to have flush/fills at 30K mile increments. To save BMW overhead costs it was never put into play. Check the factory maintence book….crickets…..Consequently many folks were faced with a 8 thosand dollar bill at 60-70K miles…..?

    5) BMW…..The hardtop keeps getting bigger ! BMW did the same thing with their 320i models…originally the smallest BMW manufactured. As years went on it got bigger, bigger and BIGGER. The end result of which was they LOST Customers who didnt want a LARGE BMW Sedan. So eventually, after losing that market ( duh?! ) they manufactured ( albeit too late folks already found another brand by then ) the BMW One Series…then the BMW Two Series…..to fill the gaps THEY CREATED. So here we go again, they bring over their BMW philosophy of LETS MAKE IT BIGGER to the table…what happened ? Well, its a M I N I !!! ( small ?) What do you expect ?!

    As I see it, the problem is BMW. They fail to grasp of the whole concept and foundation of the MINI Community, and what demographics of buyer brought them to the MINI table in 2002….and as long as they continue to promote from within BMW to upper management postions of MINI, it will only get worse or reach a level of saturation….

  • Michael Cohen

    Coming in late to this..A lot of blame on marketing but its hard to market when the identity of the product is uncertain. Mini started with incredible design but they were among the most sporty cars for the price. They’ve tried to take the product more upmarket and they’ve left the sporty feeling behind. Beauty in the eye of the beholder but with each new generation they resemble Frank Stephenson’s R50 masterpiece they way a pudgy sibling resembles the prom queen.

  • Deer Birch

    The reason sales are dropping is because people buy a Mini, get ripped off by the dealer on service, and then tell everyone they know not to buy a mini.

    I know that’s what I did.

    • Cheerio Hua

      Exactly right, each time I take MINI to the dealer, the repair is over $1,000. That’s BMW territory, but I get much better service at BMW. If you look online, the parts are dirt cheap, so why is the repair cost so high? Sounds like Stealer in action.