Mini to dealers: Don't gouge

Fans of retro car put $1,000 deposits on expected hot seller

Home run?
Why the Mini Cooper and Cooper S could be hits


  • Low price, which is expected to start around $18,000

  • Limited availability, with U.S. sales volume initially capped at about 20,000 units annually

  • Enthusiastic response by owners of the original Mini, which was sold here in the 1960s

  • Positive reviews by the automotive press, such as AutoWeek, which said, "The Mini Cooper is as much fun to drive as it is to look at." AutoWeek is a sister publication to Automotive News.

  • The 2002 Mini Cooper, a retro four-seater, is expected to command a price thousands over sticker, analysts say.

    Mini, meanwhile, is warning dealers: "Don't gouge." But that hasn't stopped enthusiasts from placing their names on an interest list and, at one dealership, offering $1,000 deposits.

    Though Mini is owned by the BMW Group, the car's styling draws on the original car's British heritage. BMW Group bought the Mini brand from the Rover Group in 1995, and the redesigned Mini Cooper went on sale in Europe this year.

    "It is definitely one of the bright spots of 2002," said Jeff Schuster, director of product analysis at J.D. Power and Associates. "We will see some dealers making pretty good profits on this car," said Schuster, who believes there is sufficient demand to sell 40,000 Mini Coopers annually. But Mini's projection is far less: The automaker expects to sell about 16,500 cars in 2002 and 20,000 in 2003.

    Mini in size, too

    The Mini comes in one form, a front-drive, three-door hatchback. The car is small by U.S. standards: The length is a mere 11 feet, 10 inches.

    Although U.S. advertising has started, sales of the four-cylinder 115-hp Mini Cooper are not scheduled to begin until March. The base Mini Cooper is expected to have a sticker price of about $18,000. The supercharged 163-hp Mini Cooper S will go on sale a short time later, a model that is expected to account for about 40 percent of sales.

    Dealer agreements are expected to be signed in January. Seventy dealers have received letters of intent, and each dealer is expected to receive 30 cars a month in 2002 and 2003. The names of dealers expected to sell the car are posted on Mini's corporate Web site, .

    Long Beach Mini in Long Beach, Calif., which, like other dealers, is expecting to receive about 250 cars this year, has a list of about 1,000 interested people.

    "Because we're such a car culture here in California, I think people are aware of new products coming out, what they think is going to be hip and what's not," said Matt Limburg, a Long Beach Mini salesman.

    Brian Riggs, business development manager of Global Imports Mini in Atlanta, said his dealership has 38 deposits: "We are taking $1,000 deposits that hold a spot in production. You get to spec out your own car."

    Once sales begin, Riggs estimates that a buyer who places an order will have the car in less than 90 days.

    Above sticker?

    Although most would-be buyers have not seen the Mini Cooper in person, Riggs believes market demand could push the transaction price above sticker.

    "The car will be sold for market value, whatever the market will bear," Riggs said. "It could be as much as 10 percent (over sticker)."

    Mini spokesman Michael McHale said the company will be watching dealers: "We understand and they understand that the long-term benefit to Mini is that they don't gouge."

    McHale said Mini has no plans to follow Ford Motor Co.'s lead. Ford Motor is asking dealers to have Thunderbird buyers sign an agreement that they will not sell the car for six months. The effort was made to prevent brokers and speculators from selling the car at a large profit.

    Short U.S. history

    Enthusiasts of the original Mini were attracted to the car's fun-to-drive handling, front-wheel-drive traction and low price.

    Minis were popular for road rallies and racing. Although 5.3 million Minis were sold worldwide from 1959 to 2000, only 10,000 cars were sold in the United States, between 1960 and 1966.

    Limited U.S. sales for the original car and the Mini's size are expected to limit the car's long-term sales appeal here.

    It likely won't have the same attraction of such retro hits as the Volkswagen New Beetle and Chrysler PT Cruiser, analysts say.

    "The car doesn't have the sentimental appeal that the (original) VW Beetle did," said Dan Poole, an auto analyst for National City Private Investment Advisors.

    "Many of us owned Beetles or we knew somebody who owned a Beetle."

    The PT Cruiser is successful because "it doesn't bring back memories of a specific car. It brings back memories of a genre," Poole said.

    The Mini Cooper "will appeal to the Austin Powers crowd, the James Bond crowd. There will be an interest in it but certainly not to the extent that the others have," he said.

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