US MINI Stores May Begin to Move In With BMW Amid Sluggish Sales

Automotive News thinks so. According to the publication MINI USA is considering allowing US MINI Stores to move in with their BMW parent stores for the firs time. The decision (which hasn’t been finalized) along with others MINI USA is planning could help defray operating costs and stem dealer losses.
It all comes from lack of sales. MINI had projected US sales of 100,000 cars by 2017. While they were on pace with 66,000 in 2013, the brand has struggled as all small car manufacturers have since. This year MINI USA sales totaled just 37,359 through October.
This change would be a major one for a brand that has insisted on having a very separate identity from BMW.
Making things worse there’s very little to suggest the sales trend will change soon. MINI’s lower sales comes at a time when U.S. consumers shun cars for light trucks.
This has resulted in 69 of 127 US MINI dealers being unprofitable according to Automotive News. A staggering number and one that MINI USA is apparently aware of:
“We want to focus on dealer profitability so that they are properly represented in the marketplace,” Thomas Felbermair, vice president of Mini Region Americas, told Automotive News in an e-mail.
The solution could very well be combined dealerships. According to Automotive News, MINI is working to accommodate dealer requests to integrate Mini operations into BMW stores, while ensuring brand differentiation. To do this, MINI is looking at separate MINI-branded showrooms with dedicated sales and service employees.
MINI also is working with some dealers seeking to downsize their retail locations. In additions, the company is working to reduce requirements for the number of showroom vehicles and showroom space.
“We’ve given a lot of flexibility for the dealers to present ideas,” Felbermair said. “This is to help make sure that, until our next wave of product, and the market becomes more favorable, our dealers each remain a strong and going concern.”
Many of you who read MotoringFioe are also selling MINIs. So don’t have to tell you about the frustrations that is being felt by a lack of product. Really the only truly new thing on the horizon is the electric MINI Cooper E and a limited edition JCW GP. While the Clubman and Countryman will see revisions they aren’t expected to solve the sales problem alone.
Here’s an excerpt from the Automtoive News piece:
“There’s no new products on the horizon that give dealers the warm feeling that things could turn around for our current standalone business model,” said Michael Vadasz, former chairman of the Mini dealer council.
Mini acknowledged dealer frustration with the lull in the product cycle.
“We’re in a development phase,” Felbermair said. “There’s a number of longer range projects that you will see come to fruition.”
Mini dealers said their buildings are too large for today’s market.
“It’s not sustainable,” said Vadasz, general manager at Otto’s Mini in Exton, Pa. “We can’t afford to be in these big buildings.”
We spoken about it before but like us, many dealers believe there’s simply a lack of consumer awareness. According to Automotive News, one dealer, who asked not to be named, said the automaker has for years lacked the funds to properly market its cars, and has failed to target the right customer segment.
The brand was launched with an expectation of capturing the American youth market. But that didn’t happen. The dealer said, “About 65 percent of my customers are over the age of 40.”
The difficult thing with a lack of awareness is that it doesn’t matter how good the current product is (and it’s the best it’s ever been). If the market isn’t aware of it, it will simply sit on dealer lots.
12 Comments
<p>“MINI of Manhattan, a BMW owned store, operates independently from its sister BMW store next to it despite being in the same building.” …. MINI showroom has moved a few blocks away from the BMW building for quite a few years now …</p>
<p>“The brand was launched with an expectation of capturing the American youth market. But that didn’t happen. The dealer said, ‘About 65 percent of my customers are over the age of 40.'”</p>
<p>Ah, the age when people can actually afford a new MINI…</p>
<p>This explains why there was a turn over at the service department at my dealer a while back and people that work there now knows almost nothing about cars and even less about MINIs. The service there is shockingly poor now; they just hire people that are willing to accept the lowest of low pay. Shout out to MINI of Monrovia, and those potato sacks they call employees.</p>
<p>Its like a cascading effect, not many people are buying MINI, and the people that do are now turned off by terrible service. I dare anyone to call the service department and see if anyone picks up the phone.</p>
<p>Service should be better at a place where the cars basically cost as much as a the highest volume Lexuses, so maybe at this point its a good idea to fold them into BMW</p>
<p>^^^^ Yup, I’ve moved on to Lexus when the time came to get a new car. Lexus are light years ahead of MINI/BMW service. I’ll never give up my R56 but I’ll never buy another MINI again. My wife and I did pick up a toy for her in the form of the last model Z4 prior to ending that particular iteration. But it was used, I paid cash for it and I do all the maintenance (have a private shop lined up for any major repairs) so it will never see the dealership’s service department while we own it.</p>
<p>The problem with combining is that the whole MINI culture will be lost. BMW and MINI dealerships have two completely different atmospheres.</p>
<p>I feel the MINI culture was lost about a decade ago.</p>
<p>good point!</p>
<p>My local MINI dealership just opened a brand new, independently operated store a year or two ago next to the BMW dealer after sharing showroom space (separated by one inside wall only) since the 2002 debut. It pains me to think they might have to now move out and back in with BMW after the BMW group tried so hard to differentiate / distinguish MINI from the rest. I really hope they cut costs, ‘regroup’, add new (and unique) products sooner rather than later, and kick butt like they did way back when.</p>
<p>Throughout most (all?) of the first generation of the MINI brand in the US, they shared buildings with their BMW cousins. There was typically a separate space within the same showroom with dedicated Motoring Advisors, Service Advisors, and MINI motif.</p>
<p>The product line was far smaller back then with only the hardtop and later followed by the convertible. When the lineup ballooned with the addition of the Clubman, Countryman, Paceman, Coupe, Roadster, it became necessary to mandate separate retail space for franchise owners.</p>
<p>Now that the lineup has again contracted, and sales are down from the peak days in 2013, this move makes total sense.</p>
<p>If we want MINi dealerships to survive and thrive, reducing operating overhead is a key decision. Also, it helps to get additional traffic into showrooms as BMW buyers will once again be exposed to MINI products.</p>
<p>Sounds like a win/win to me, and I support the courage dealerships have displayed to push for this change with MINI USA.</p>
<p>This goes further than that. This change would mean they’d share the same showroom as in no walls between the brands.</p>
<p>Those details and guidelines are yet to be determined. I suppose we’ll see how this plays out over the next year or two.</p>
<p>Let’s look at what the under 40 have going for them, student loans & high housing costs. Pay and benefits largely stagnant for 10 years now.</p>
<p>Until that changes, there’s never going to be a youth market with money to burn.</p>