Premium does not equal high cost. Nor does a move further upscale mean MINI will turn its back on the style and performance that has made the brand such a success over the years. Now with that out let’s get to the why, how and when.
BMW held onto MINI after the Rover debacle for a few reasons. The ability to lower corporate MPG numbers was certainly one. Another was about placing a smart bet that dipping its corporate toe in a front wheel drive small car brand would be a good idea for the future. And what better brand to do that with than the one that invented the segment.
Fast forward 15 years later and MINI has been full integrated into the BMW family. Not only every generation but every year since that 2001 R50 launch, MINIs have become more integrated into the BMW family. Some would say they’ve become small BMWs. Or you could look at it as BMW has allowed MINI to make better MINIs. Either way the level of refinement and sophistication (not to mention performance and efficiency) has risen dramatically.
But there’s a problem. MINI isn’t making enough money for BMW. The cars are small front wheel drive BMWs being sold for $20,000 USD. Profits are razor thin on moderately specced cars and likely non-existent on stripped down base models. BMW has had two three choices over the past few years. Partner with another automaker (which they’ve tried), abandon the brand (which some have recommended), or simply double down and go it alone.
That’s exactly what they’ve done. BMW has doubled down in its investment of the brand and its products with the UKL platform and an entirely independent strategy that cut out PSA (its former engine partner) from future products. They did this by introducing something many of us never expected to see: front wheel drive BMWs. This strategy has allowed BMW and MINI to remain independent in a shrinking pool of massive global automakers.
The UKL based front wheel drive BMW family will grow from the current two models (The 2 Series Active Tourer and 2 Series) to five over the next few years including a four door sedan that is likely the closest we’ll every see to a MINI four door. Combine that with MINI and BMW will have at least 10 front wheel drive models spread across every small car category you can imagine (except a city car).
This move has allowed BMW to pour much more time and cash into the development of the UKL cars than anything they’ve ever devoted to MINI in the past. The outcome are cars that are much more advanced and (dare we say it) premium as compared to past MINIs.
The problem is that MINI has to be very careful with how they evolve MINI into a premium brand. It starts with a premium product assault – the new F56 MINI and the rest of the UKL based MINI range being the beginning. But pricing is key as MINI doesn’t want to walk away from the $20k price point on the base Cooper. Frankly we don’t expect them to. But if MINI has their way average transaction prices will rise with more emphasis on premium options and packages that tempt would be owners further up the ladder.
Now that product is living up to the idea of premium, MINI can turn to sales and service. This is where MINI and MINI USA specifically see opportunity. From digital tools and a more concierge type of sales and service experience, MINI intends to make ownership even more special. As always the execution is critical here.
What premium doesn’t mean is that the brand becoming less enthusiast oriented or even less value oriented. In talking with MINI USA execs over the last year it’s been clear to us that those aspects of the brand are critical to them. They need to tell in volume more than ever before. The F55 four door and the new F55 Clubman should help there. As should the larger more consumer friendly Countryman. But MINI recognizes that they must nail the feel of these products. In other words they have to drive like a MINI. That’s where BMW’s cash comes in. The amount of investment made in MINI thanks to BMW’s front wheel drive strategy is the key ingredient to selling more, appealing to a broader segment while delivering the typical performance that MotoringFile readers love.
Now. It started with the F56. But in effect that car has laid the ground work for MINI to reinvent the line-up. Next up will be the Clubman which will bring more space and comfort to the MINI range despite being only a hair larger than the Countryman. From there MINI will turn its attention the Countryman, a vehicle that the brand has very high hopes for. Slightly larger and riding on a platform (like the Clubman) capable of hybridization, the Countryman will offer a huge range of sophisticated drivetrain options worldwide. In fact both of these larger MINIs have been rumored to be recipients of the high output 2.0L turbo that the BMW has been working on for the past several years. Add a plugin hybrid variant and perhaps even a full electric model and suddenly you have something truly different from the range.
Also look for options to increasingly grow and along with improved sales centers and service touch-points.
While we expect entry level pricing to increase modestly (on par with previous increases), MINI believes these new products and the overall strategy will work hard to entice you into higher levels of specification and ultimately price points.
Will it work? Bookmark this and come back in five years. We should have an answer.