BMW officially denied a report Wednesday from a leading German financial magazine that MINI was struggling to make a profit. Here’s an excerpt from a Reuters article:
>Manager magazin wrote in an advance copy of its Friday edition that some people at BMW are in favor of producing a Mini sport utility vehicle due in 2010 on a joint platform with the A-Class made by BMW’s archrival, Mercedes-Benz.
>It said the reason for the unofficial talks with Mercedes over joint Mini/A-Class production was the current difficulty BMW had to pull Mini back into the black, and that the brand would be close to posting a loss even if Mini’s Oxford plant in central England were to produce at full capacity.
>The introduction of the Mini in 2001 was a resounding success for BMW, which only last year expanded its Oxford plant to rev up sales of the second generation model, rolled out in mid-November, to around 240,000 units come next year.
You can read the entire article below:
[ BMW denies report Mini fighting to stay profitable ] Reuters
MF Analysis: This news seems to tie-in with the recent rumors of a possible Mercedes/BMW partnership based around the MINI and the A-Class. However now we get a bit of potential background as to why a partnership may be necessary.
With only two years until the 2010 model year is upon us, it would seem that time is quickly running out for this partnership to become reality. If both companies are going to commit to working together, we’d imagine it would either have had to happen by now or the projects are going to be pushed back.
If it was in fact true that MINI was not making a profit what does that mean to the future of the brand and what impact does that have on current owners?
I accept BMW’s word on this, especially if you factor in things like MINI’s contribution to U.S. CAFE compliance and step-up effects (MINI buyers becoming BMW buyers).
However, MINI assembles its engines and final vehicles in the U.K., and the British pound has surged in value. Currency appreciation doesn’t help. One pound is almost $2.05 now! Every U.S. dollar or Japanese yen that MINI collects is less and less helpful to meeting Oxford’s payroll and other expenses. I would assume MINI/BMW take advantage of currency hedges, but hedging is seldom perfect and always expires.
Are there any other U.K.-built cars in MINI’s price range selling in the U.S. or in Japan? I can’t think of any.
Hmm…the Ford Cars in SE Asia seems more related to those from the UK rather than that from the USA….Ford Focus for example…or Ford Modeno….though I could be wrong…
Happy Motoring.
I know BMW would like to see more profit from the Mini brand, but seriously doubt this report that they are losing money on the brand.
Small, “inexpensive” cars have historically had very tight profit margins.
Could this be also that the second generation MINI is not selling at the profit margins BMW originally envisioned prior to launch?
Food for taught….
Small? Inexpensive? I don’t find $32-34,000 inexpensive but then I like eggs.
I wonder what’s spin and what real.
Yeah, certainly agree the MINI is not a thrifty purchase. Or at least, in Australia, where we only get the Cooper and Cooper S. A specced up Cooper in Australia would comfortably cost more than a base model 3dr Golf GTI, for example.
i would automatically think that with the impact the MINI has had on not only BMW, but on the car world, MINI being non-profitable would be the last thought on everyone’s mind. am i wrong for thinking this? im thinking now about volkwagens ownership of bugatti. but im sure BMW is definitly making more of a profit off the 1 million+ coopers compared to the handful of veyrons out there.
It would be interesting to know what were the original sales projections for the R56 and how these compare to actual R56 sales to date.
Of course we will never know, because BMW will never release confidential marketing information that may indicate the new second generation is not exactly selling like “hot cakes”.
Anyone care to challenge this position with hard data?
Bring the Cooper D to the U.S. and see what sales and profits will do.
I second that. Bring the Cooper D here