Mini Countryman, Mini Cooper fuel excitement

BMW's Mini brand, riding a 14 percent sales gain for 2023, is poised for further growth this year as a wave of new products reaches the company's 104 U.S. dealers.

On tap is a new, larger and more powerful Countryman compact crossover that shares its underpinnings with the BMW X1. The Countryman will be available in the first half of 2024, first with a gasoline engine and later as an electric vehicle.

Also in the first half of the year, the latest version of the iconic Mini Cooper hardtop arrives with new styling inside and out and a more powerful engine but, for the first time since the brand returned to the U.S. in 2002, no manual transmission.

Tracy Gurnett, 49, Mini National Dealer Council chair and general manager of Mini of Austin in Texas, spoke with Staff Reporter Richard Truett about Mini's prospects for 2024. Here are edited excerpts.

Q: I've owned three of the new-generation Minis — an '02 Cooper, an '03 Cooper S and a '10 Cooper S. They were so much fun to drive and they made me smile. Does Mini still have that mojo?

A: It's true about having a smile on your face because that is the truth with these cars. Having been in automotive for a little over 30 years, I can tell you Mini is the brand that I always look at and smile. There's some attachment where you just feel like you're a part of something.

And it's more than just transportation. Mini is a unique brand and it just has such a wide breadth of who it attracts. Parents come in with 15-year-olds who are getting ready to drive. And then I have a customer who was in yesterday for service. She is 94 and she's put 22,000 miles on her car in the last two years. There's not a lot of brands out there that have that range of appeal. It's pretty cool, and it makes it fun to come to work.

The last few years have been tough for Mini, with stores closing, buyers moving from cars to SUVs, and all the buzz around EVs. How are Mini dealers feeling as 2024 gets underway?

Everyone is extremely excited about the new Countryman products that arrive in May. And then we'll have in September the all-electric Countryman — a long overdue product that has been eagerly awaited by the entire dealer body. So, a lot of momentum and excitement as we head into '24.

Speaking of electric Minis, the first one that came out didn't have a lot of range — 114 miles or so. But it sold well. What do you suppose was behind that?

It really was in a unique price point. You got all of the fun to drive of Mini and also it gave us that entry into the electric market at a price point that really didn't have a lot of competitors. I think there was an urban EV market where range wasn't an issue.

What are the expectations around the Countryman EV? Are dealers seeing early interest?

Yes, absolutely. We've had a lot of early interest. We had a lot of customers who defected to Tesla from Mini over the lack of EV offerings. And I think that the new Countryman will drive customers back to the brand that they love. In addition, we've got a really unique nationwide conquest opportunity with the vehicle, for both BEV and ICE, which are being made on the same chassis. The launch will be staggered with ICE coming first. The supply should fit demand as the production line has the capability to pivot to the market needs. We expect heavier BEV preorder volume and then sales, especially out on the West Coast.

Teslas are not exactly inexpensive. Why would a customer who can afford to buy a more expensive car such as a Tesla choose a Mini?

The biggest reason for defection was range. We have customers who have several cars in their garage.

They like cars that bring a fun-to-drive element. They'll be back, for sure, especially with the new Countryman BEV.

Do Mini dealers want the two recently announced EVs, the Aceman and the two-door EV, to come to the U.S.?

Yes, absolutely. The brand was originally built on the two-door hardtop. And while the Countryman has been a vital addition to the lineup with significant consumer demand in the U.S., the iconic two-door in a BEV offering will definitely have huge value here.

Mini plans to go all electric in 2030. But last year the rate of growth for EVs slowed in the U.S. Do you think Mini should reevaluate its powertrain strategy?

Mini is still committed to offering a significant volume of ICE production on all models. And as I mentioned earlier, the ability to pivot quickly with market dynamics is very much keeping their eye on timelines and what they're offering for product.

How many Mini dealers are there? And do you think that's the right number?

There's 104 today. And I believe that Mini is constantly looking to make sure they have proper coverage across the U.S. So, we may see an addition here or there. But right now, we're at 104, which seems to be the right number.

What is the biggest unmet need Mini dealers face today?

It's new-car volume growth because that's really needed to feed the service department and used-car market and especially the lease portfolio.

Will many more Mini dealers combine with BMW stores?

A large number of Mini stores still believe in and are fully committed to a standalone dealer model to service their particular customer base. BMW Group has, however, provided the option for dealers that want to take advantage of combining. But I can't speak for the rest of the dealer network.

We've seen inventory levels start to increase for many brands. What are Mini dealers expecting for the days' supply in 2024?

I would expect that an under-30 days' supply is a healthy number, with high consumer demand on the new Countryman to accelerate the turn rate and significant pipeline sales percentage.

Is there any talk of incentives increasing in 2024?

Nothing beyond the very strong offerings that were announced in December.

Are any models in really tight supply?

The inventory is quite balanced at the moment in terms of both availability and utilizing Mini's reservation system.

All the Minis that I've owned had a stick shift. It's the one kind of car that many drivers love to shift gears themselves. Now the manual transmission is ending with the outgoing generation. How will that affect sales?

The manual transmission is coming to end for the Mini lineup. But I think that the fun-to-drive aspect of the Mini, regardless of the transmission, doesn't go away. That's really the heart and soul of a Mini. So that go-kart feel and handling won't be impacted one bit by only having an automatic transmission.

Interest rates ballooned last year, and affordability became more important. Did that impact Mini sales?

Mini has really stepped up, especially with a very strong 2.99 percent offering [in December] along with enhanced customer cash and lease credits on the existing BEV model.

Mini has stayed very consistent with very attractive APRs throughout the year, so we have not seen that have a negative impact on Mini sales.

What's the leasing outlook for 2024? Do you expect to see any deals or increased leasing penetration?

We certainly need to increase our lease percentage and customer portfolio and a mutual effort with the OEM to be aggressive in doing so is fully expected by the dealer network.

Are there any expectations that margins will change in 2024?

We expect healthy margins with the Countryman model, on new and still balanced on used based on what we've seen in 2023.

Is Mini doing enough to prepare dealers for selling and servicing EVs?

Yes. They are very engaged in EV readiness with the entire dealer network.

Are there any new requirements or sales standards involved in the switch to EVs?

Charging capability has been addressed along with new facility brand standards.

We're starting to see more direct sales and agency models. Are there any concerns that Mini is going to do that here?

No.

Are any vehicles missing from the Mini lineup?

Outside of the two-door hardtop BEV mentioned earlier, nothing else is missing.

Has Mini required any changes to facilities?

Retail Next, which Mini branded as Retail.next, is underway networkwide. About 95 percent of the dealer body has completed the Retail Next updates.