Mini USA Sales Surge 33%

BMW Group-Owned Brand Ups Production to Meet Demand

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DETROIT (AdAge.com) -- Mini USA managed a whopping 33% jump in new U.S. car sales in the first half of 2008 vs. a year ago -- a major feat in the industry's worst sales year in at least a decade.
The larger Clubman model, which was recently added to Mini's lineup, is expected to account for about 20% of Mini's U.S. sales this year.
The larger Clubman model, which was recently added to Mini's lineup, is expected to account for about 20% of Mini's U.S. sales this year.

Driven partly by skyrocketing gas prices, Mini USA's sales region may surpass the U.K. as the top global market for the small car this year, Jim McDowell, the VP heading the brand in the U.S., said today. He predicted this year will be Mini's best year in the U.S. since it came back to this country in 2002. Its prior recent record here was in 2007 with 42,045 new cars sold.

Thousands more in pipeline
To meet demand, the BMW Group-owned brand is increasing production in England for the U.S. market this year with between 2,000 and 3,000 more Minis built for this country in the second half of 2008.

Mini expects to grow at least at five-fold -- or at pace with its own industry projection of 1 million small cars sold in 2010 from the roughly 200,000 sold in the U.S. in 2002. "We saw the world becoming more Mini," Mr. McDowell said, though he admitted that Mini will never dominate the small-car segment even as it grows its volume.

Charlie Hughes, founder of car consultant BrandRules, said profit per vehicle, not unit sales, has been the core of Mini's business model. "Mini is not an expensive small car, but a very inexpensive status car," he said. "There's a difference, and that takes brilliant marketing."

Quality issue lingers
But he said Mini has a quality issue it needs to fix. Mini ranked only ahead of Jeep in consultant J.D. Power and Associates' annual Initial Quality Study of 36 auto brands, based on results from 81,500 owners and lessees of new '08 models surveyed after 90 days of ownership.

Mr. McDowell said Mini is always looking at ways to improve quality, but said Mini has some "design issues that can weigh down" its so-called IQS score. He noted that in the same survey, Mini is at the top in the number of owners saying they would recommend the car to friends and family.

He added that Mini's fuel efficiency is 37 miles to the gallon, which he noted is as good as many hybrids, and fuel efficiency is one of the reasons buyers pick the brand. (Toyota's hybrid Prius is one of the models most cross-shopped by Mini buyers.) Another main reason that consumers pick Mini is that they want to leave the earth in better shape.

That sort of insight is one reason for Mini's new magazine ad from Butler, Shine, Stern & Partners of Sausalito, Calif., carrying the headline "Drive Like There Is a Tomorrow." Mr. McDowell said Mini plans to use that theme in other mediums this year. He said the ads won't necessarily drive sales this year, but he's hoping they pay off in 2009.

New models added
This year, the company added the larger Clubman model to its lineup of the hardtop Mini and convertible Mini. The Clubman, with a base price of $20,600, is 13 feet long, or 9.45 inches longer than the Mini, and is expected to account for about 20% of Mini's U.S. sales this year. In late fall, Mini will take the wraps off a fourth model, a low-riding crossover, and by this time next year, expects to have a Mini electric car available, Mr. McDowell said. Next spring, there will also be a new Mini convertible.

Mr. McDowell said Mini could eventually have six different models, but Mr. Hughes said that is tricky territory. With too broad of a lineup expansion, "at some point you lose the character of the car," Mr. Hughes said.

Mini is most often cross-shopped with Honda, Volkswagen, plus Toyota's Scion and Prius, said Mr. McDowell. About half the people who buy Mini don't seriously consider anything else, and some can't afford to buy the Mini, so they get something else. "What's amazing to me about Mini is how many buyers could have afforded a much more expensive car," he said.
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