Miniature sales numbers could soon force Minis, which currently have their own dealerships, to share space with BMWs.
The Mini marque, which is owned by BMW, has had stand-alone Mini stores since 2008 as part of its efforts to maintain a unique, independent image. Today, there are 127 Mini stores. Mini dealerships, though, appear to be struggling to sustain this independent dealership model due to lower-than-expected sales numbers.
Mini projected it would have 100,000 in annual sales by 2017, but it hasn’t yet topped 66,500, a number it reached in 2013. The brand’s sales decreased by 10 percent in 2017, and through the first 10 months of 2018, Mini sold only 37,359 cars.
This has led some Mini dealers to request an integration with nearby BMW dealerships to reduce overhead costs and increase efficiency. Sharing costs associated with real estate and operations could help the brand stay afloat.
“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.
BMW and Mini, however, want to ensure brand differentiation should the two merge dealerships. To accomplish this, they’re considering creating separate Mini showrooms at BMW dealership locations. Dedicated Mini salespeople and service workers would staff these showrooms. Mini is also working with some dealers to reduce their requirements for showroom space to facilitate the move.
Mini has also indicated that it’s exploring other ways to support dealerships that would remain independent.
Challenges Facing Mini
The sales slump is the primary challenge facing Mini, but another issue is the lack of new product. Mini introduced the redesigned Countryman in spring 2017 and a plug-in hybrid variant later that year. A full-electric model is expected to arrive next year, but some Mini dealers have expressed worries that there isn’t enough new product on the horizon to keep customers interested.
“We’re in a development phase,” Felbermair said. “There’s a number of longer range projects that you will see come to fruition.”
Some dealers have also expressed concerns about a lack of consumer awareness caused by inadequate marketing funds.
Perhaps the biggest threat, though, is the fact that the company hasn’t been able to convince Americans to buy premium small cars. The U.S. market for SUVs and light trucks is strong, but that of premium compact cars continues to struggle. Mini also hasn’t been able to attract the young drivers it originally that would be its core audience.
“As a dealer and a manufacturer you have a vision of where the brand is going, and you have to prepare for it,” Jason Willis, a member of the Mini National Dealer Council, told Automotive News. “In this case, the vision now isn’t what it was when some of these stores were built.”
However, BMW and Mini still have hope that things will turn around. The marque is going through a bit of a rough patch that’s left it unable to maintain its independent dealership model. Although the company hasn’t made a final decision yet, reducing costs by moving in with BMW dealers may help Mini hold on until conditions improve.