An Inside Look at How MINI USA Handles Failing Dealers & What’s Next for the Brand
Recently we reported on the closure MINI of San Francisco and what that foretells for other MINI dealers and the region. However the story is a bit more complex than you might expect. So we sat down with MINI USA’s Head of Sales Claude Bruni to better understand this closure and what plans were in place for SF region. We also wanted to find out how MINI USA handles dealer closures and regions affected. Finally we wanted to get a pulse on MINI sales and what lies ahead for the brand.
MINI of San Francisco serviced a massive market for the brand and MINI USA is well aware of how this closure could look. And for his part Claude was very transparent about the importance of the San Francisco market and the need to find a solution for those owners. “MINI USA is actively pursuing several options to maintain sales and service within the city of San Francisco. We’re also looking at creative ways support owners from a service perspective,” he added.
But MINI USA isn’t interested in just solving for the service of existing cars. “We’re looking to solve across both sales and service and find a model that bests suits our customers. We want to make it modern based on the needs of customers in the area,” Claude added.
Interestingly MINI USA is even thinking about alternative work models beyond the standard dealership. After hours service, pick-up and drop-off and even shuttling cars outside the city for service are all ideas that are all on the table. While there’s nothing yet to report, clearly plans are underway for a solve.
Claude continued, “This is a transition and not the loss of a dealer. We are committed to maintaining a presence in San Francisco.”
Why Do MINI Dealers like San Francisco Close?
While Claude or MINI USA won’t comments on the financial health of an independent dealer, we’ve heard from sources that the high costs of the city and an aggressive expansion into two buildings led to financial issues.
While San Francisco has the unique complexities of scarce space and high costs, it’s not the only area that has suffered a closure. MINI of Plano is another dealer that has recently announced it was shutting its doors. There the solve is a bit more straightforward, “we’re directing owners to the other dealers in the market for the time being”.
When I asked Claude about it and the few others he spoke about the need for MINI to maintain presence in key markets. But he was also realistic about the current automotive landscape. “70% of sales in the United States right now are trucks. The reality is that MINI is a niche product within a small market in the US. We’re not going to push volume at the sake of volume as other automakers do.” When I pressed him on overall MINI sales (and small cars sales) being down over the last few years he continued; “We want to build as many cars as we need for our customers. We want to focus on building the brand in a slow and methodical way in the United States”.
The Future of MINI Dealerships
No matter what happens in places like San Francisco, MINI is holding true to what a dealer should look and feel like. “In certain markets we’re allowing the coupling of MINI and BMW. However in areas where sales are higher we don’t see them integrating.”
“What we don’t want is for our customers to feel abandoned when there are these types of transitions. And if they have questions or concerns about a closure we’d love to hear from them directly”.
One thing that was very clear is that MINI USA is not looking to abandon key markets. Where they have closures they will be working to transition that market to other operators in the area.
Reason for Optimism at MINI Dealers
While sales were down last March, it’s a hard thing to judge given that there was a sales runout in March of 2018. There are some signs that point to a better second half of 2019. And in talking with Claude you could sense real optimism in his voice about what they have coming. The recent Countryman ads that pair the car up with a classic Mini rally car “appear to be working” he added.
Claude and the MINI USA team are looking at the second half of 2019 as a big year for the brand with a number of updated products and the introduction of the all electric MINI Cooper ES very late in the 2019. “We’re about to expand our offerings and we expect more customers to be interested in the brand in the months ahead. With these new products, we’re very optimistic we’ll be able to rejuvenate interest.
When I asked him what kind of production numbers and availability we’d see for the electric MINI you could see it was on his mind. Once the initial launch concludes, “I’ll make sure we get enough in this country to satisfy demand” he said smiling.
If MINI wants to stop hemorrhaging sales they must stop these milquetoast LCIs that offer no additional power, no substantial improvement to the exterior styling (fish mouth I’m looking at you), no additional standard features and stop raising prices. The biggest turn off of the current MINI lineup is the fact there are much better cars available for less money. If MINIs still looked like they had looked 10 years ago, people wouldn’t have defected, but they’ve just gotten ugly. Not to mention they don’t even drive like MINIs did for the first two generations. The R56 LCI was the best version of the MINI. It had great looks, was a blast to drive, was more fuel efficient, sounded better, and didn’t look like a bloated caricature with a bruised lip. When they released the F56, I knew the writing was on the wall. It’s time for an all new generation Hatch to be released, but I doubt that will even happen. MINI is probably at the end of its run. BMW is losing money hand over fist, as are the poor dealerships that are stuck selling outdated products that aren’t competitive and substantially overpriced. Go back to basics MINI. Like what’s happened with BMW itself in the past decade, they got too soft and abandoned the buyers that had made MINI successful to begin with. BMW claims to be going back to performance with the new 3er, but it’s not enough. It’s still not as good as the old E92, which is a shame. Hopefully if BMW let’s MINI live to see a G56 model it will abandon the current styling and go back to the classic look, albeit modernized. Better engines are a must. The 2.0T sucks… It’s just so boring and underpowered.
<p>If MINI wants to stop hemorrhaging sales they must stop these milquetoast LCIs that offer no additional power, no substantial improvement to the exterior styling (fish mouth I’m looking at you), no additional standard features and stop raising prices. The biggest turn off of the current MINI lineup is the fact there are much better cars available for less money. If MINIs still looked like they had looked 10 years ago, people wouldn’t have defected, but they’ve just gotten ugly. Not to mention they don’t even drive like MINIs did for the first two generations. The R56 LCI was the best version of the MINI. It had great looks, was a blast to drive, was more fuel efficient, sounded better, and didn’t look like a bloated caricature with a bruised lip. When they released the F56, I knew the writing was on the wall. It’s time for an all new generation Hatch to be released, but I doubt that will even happen. MINI is probably at the end of its run. BMW is losing money hand over fist, as are the poor dealerships that are stuck selling outdated products that aren’t competitive and substantially overpriced. Go back to basics MINI. Like what’s happened with BMW itself in the past decade, they got too soft and abandoned the buyers that had made MINI successful to begin with. BMW claims to be going back to performance with the new 3er, but it’s not enough. It’s still not as good as the old E92, which is a shame. Hopefully if BMW let’s MINI live to see a G56 model it will abandon the current styling and go back to the classic look, albeit modernized. Better engines are a must. The 2.0T sucks… It’s just so boring and underpowered.</p>
<p>So wrong…</p>
<p>I hope you’re wrong because I love the brand, but a lot of the things you’re saying are on the money. I abandoned the brand after 3 Mini’s, a 2006 and then 2 R56’s. I couldn’t get over the styling and I hated how the moved the speedo to the center stack and moved the locks and windows to the doors. After 3 Mini-Less years I gave in and leased a brand new F56 Hardtop. I love it, it’s a ton of fun and I’m digging the tech, but I still don’t like the way it looks and I miss the small things I mentioned above. I think Mini is completely talking to themselves thinking the GP will bring in sales. it’s a niche product, and kind of ugly at that. The average consumer will have no interest. The electric is exciting, but from what I’m reading, it seems that it will be overpriced and not offer enough mileage. Again, doesn’t seem to be enough to move sales.</p>
<p>Reminds me of the fall of Rome.</p>
<p>It took a long time.</p>
<p>Our local MINI dealer and the only one in the state of Arkansas opened in 2014 and recently closed on December 31st, 2018 which was Parker MINI or MINI of Little Rock. Luckily, my 2015 Mini Cooper S I had leased ended in 2017 and I ended up leasing a new Volvo XC60 instead but the last I heard MINI has no plans for those people on service and when I asked someone at the Volvo dealership because they also own the BMW dealership (Parker didn’t own the BMW dealership, but they own the local Lexus, Audi, and Cadillac franchises) they said they couldn’t do warranty work on MINIs without getting the franchise agreement which was pretty hefty from what they let on. I had been a Parker Audi customer owning a Q5 before I leased a MINI when they opened up the store here in Little Rock and as far as the dealership goes the service I’ve received at Parker’s MINI and Audi dealerships is the best I’ve ever had and the people there at both stores we’re great to deal with so it wasn’t a dealership problem in my opinion. I liked my 15′ MINI Cooper S but during my ownership experience I had it in for service for the drivetrain malfunction issues three times (first was within a week of delivery). It would go into limp mode when trying to pass and I got to where I couldn’t trust it. The last time it was in the shop for 3 weeks waiting on a part from Germany and I drove a newer Countryman as a loaner. For the price of the higher spec’d options in that mid $40K range I just don’t see it being competitive with other options out there and having the reliability issues I had with my Cooper S it didn’t make me want to lease another one although the ownership community was great. I had even went to a rally event at MINI in the Ozarks and was listening to the White Roof Radio podcast when I owned it. Also, I was glad I leased mine too because the depreciation factor on the newer MINI’s seems to be horrible compared to in the earlier years when they had higher resale values. I had spec’d mine out fully loaded around the $40 mark when I ordered it and if wouldn’t have been able to turn it back I’d been extremely upside down in it and stuck with it. I turned it in with around 10,000 miles under my lease limit in excellent condition and it still got sent to auction vs the dealer keeping it to sell. My MINI was fun to drive though and I still check in to Motoringfile from time to time but I think MINI needs to really evaluate the value proposition of the brand and work on its reliability issues. There are not that many people that want to pay in the higher 30s – 40s range for quirky premium subcompact vehicles, with reliability issues still in some cases. They are either going to go the practical route of mainstream nameplates or get something with an Audi, Lexus, BMW, Mercedes, or Volvo badge on it in that entry level luxury crossover arena. Plus you have those that complain about how bloated MINI’s have gotten and on the other end of the spectrum you have ones that need bigger vehicles to keep people from outgrowing the brand. That is what happened to me as I bought a new house during my lease period and ended having to borrow a family member’s Outback every time I needed to go to Lowe’s or Home Depot on the weekends to get stuff for it. I hope MINI succeeds and continues to improve but I think they need to really look in the mirror, take stock of the current marketplace, and make some changes to make it a better value and ownership experience overall. I’m 2 years into my Volvo XC60 lease and haven’t had any issues at all vs the same timeline in the MINI. Also, I think in areas where it doesn’t make sense to have a separate MINI franchise they should let existing BMW dealers sell them together in the same store . Hopefully something will work out in our state for existing owners so they don’t have to go out of state for service and warranty work.</p>