When Mini confounded industry expectations by selling a premium small car -- a hatchback, no less -- in the SUV-loving United States, mainstream brands seemed to shrug.
No doubt volume-brand executives thought of Mini as a nice little business. A very nice little business, actually, if you can sell 40,000 subcompacts a year for 25 or 30 grand.
Still, rival companies seemed to regard Mini as one of those quirky microniches that pop up in a market that totals 17 million -- well, 14.5 million -- vehicles annually. Fascinating now, lets get back to selling pickups and SUVs.
But things have changed, as youve probably noticed.
As the Detroit 3 hastily move to get small, fuel-efficient vehicles into their lineups, you can bet theyre dissecting the Mini model.
Basically, Mini has what the Detroit 3 desperately need. The critical question for Ford, General Motors and Chrysler may well be whether they can make serious money on small cars. They arent going to rebuild their profits by trading $10,000 margins on big SUVs for $100 margins (if that) on bare-bones subcompacts.
All of which made it doubly interesting to listen to Mini brand boss Jim McDowell talk to a group of journalists in Detroit today.
Riding high on three strong months of sales that have cleared Mini inventories, McDowell says U.S. car buyers are changing long-held attitudes about small cars. In the past, he said, consumers viewed certain attributes as linked to specific types of cars.
For example, McDowell said, Historically, in the United States, you drove as big of a car as you could afford, and a big car came with a big motor.
Similarly, performance cars got poor fuel economy. And, he said, safety-minded buyers wanted something as close as you could possibly get to a tank.
Now buyers are willing to mix things up. So a small car might have zippy performance, good crash ratings, striking styling and nice interior quality. Kind of like the Mini.
That might seem like good news for brands such as Ford, Dodge and Chevrolet. Could they credibly sell a $25,000 small car?
Powertrains are important
McDowell is too gracious to discuss other brands directly. But he says an upmarket small car needs more than leather seats. It must deliver a superior driving experience, he says. That requires a premium suspension and, especially, a premium powertrain.
I think theres no substitute for that, McDowell says.
So U.S. automakers thirsting for small-car profits must ponder how much they invest in what they have long regarded as desultory, money-losing CAFE cars.
They do have one factor on their side: a currency advantage against Mini, which builds its cars in England. Perhaps the weak dollar will help them match Minis on-road elan.
Then well see whether Minis success is repeatable, or the exception that proves the rule.