Marketing, volume on Mini dealers' minds
Mini dealers entered their make meeting at the NADA Show with three issues in mind: lower- than-expected sales volume, limited marketing spend and dealership profitability challenges. Mini executives shared positive sales volume trends and pieces of a new marketing plan, with other concerns to be addressed later this month.
The marketing spend and the awareness of Mini in the U.S. has fallen short, said Thomas Felbermair, vice president of Mini of the Americas. "We have a new agency on board. We have a new campaign starting this month, and the numbers really show a positive trend," he told dealers.
- Sales volume is improving but remains an issue.
- Dealers want to see more marketing dollars.
- Profitability is held back by facilities investments.
Mini launched a TV campaign for the Countryman in March, and the marketing spend rose in the first quarter vs. a year earlier, "which is also a positive message for our dealers," he added.
Many of the issues dealers brought up at the make meeting were deferred until a summit that Mini parent BMW will host in Las Vegas this month, said David Peterson, Mini dealer council chairman and owner of Tafel Motor Co. in Louisville, Ky. "There were lots of topics from future models, advertising spend levels. It was hopeful and also disappointing that today's group will have to wait for final disclosure for the April 10-12" meeting.
Executives told dealers that sales volume rose 14 percent in February from a year earlier, and March will also finish strong, said Felbermair. "This has been the first time [in] five years that Mini has been in a turnaround situation, and that was thanks to the Countryman," he said.
Both new- and used-vehicle gross profit per unit is rising, he added. But volume has been the most significant driver of improved profitability, he said. If dealers multiply increasing sales volume by a healthy gross profit per unit, "you will see a very positive trend in profitability in the first quarter for the dealers," he said.
But dealers are still concerned about throughput and profitability.
"Profitability is difficult right now. We have these big facilities. It's a matter of overhead. It's a matter of cost structure," said Michael Vadasz, general manager at Otto's Mini in Exton, Pa. "Dealers invested in the brand with a very specific retail volume in mind for the nation and unfortunately we just haven't gotten there."
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