With pickups, crossovers and SUVs accounting for nearly 75 percent of the market, car-heavy brands had a tough 2020, and Mini was no exception.
Mini's U.S. sales last year totaled 28,138, down 22 percent from 2019. COVID-19 was a factor, of course, but Mini is facing other headwinds, pricing perhaps being the strongest. It's possible to spend nearly $60,000 on the most expensive Mini Countryman, and the least expensive versions of the iconic Cooper Hardtop — the brand's bestseller — at dealerships today are priced in the low $20,000s to mid-$20,000s.
But Mini can be profitable — with a little help from parent company BMW, says Jason Willis, chairman of the Mini National Dealer Council. Willis, 42, dealer principal at Mini of Des Moines in Iowa, spoke with Staff Reporter Richard Truett. Here are edited excerpts.
Q: Does Mini have a long-term future in the U.S.?
A: We are the only Mini dealer in the country that does not have a BMW store in the family. So, from that viewpoint, I sure hope so.
I believe the brand can stand on its own two feet. I believe in the mission of the brand and the passion of the brand.
From the sneak peek of what I have been blessed to see of what's coming in the 2023 model year and beyond, I have great optimism that this brand is never going to be a 100,000-unit brand, that's just not what it is about. But Mini certainly can be a desirable, profitable brand for its dealers in the U.S., and I believe it will be there within the next couple of years.
How has Mini helped dealers navigate the challenges brought about by the pandemic?
When COVID hit in March and the world came to an end, the very first call I received was from Mike Peyton, head of Mini USA, saying, "Jason, what do we need to do to help the dealers?"
Mini's focus has been how we can help the dealers stay open and have them focused on our staff and community and have them stay profitable.
Among many other things, they waived some of our objective requirements of the back end, known as BB, or Business Builder. They waived all the building upgrade requirements for the year so dealers didn't have to worry about expansions or upgrades in the middle of all this. We didn't have to chase a number to hit our back-end funds. We knew exactly what we were going to get when we sold a car. That helped us take care of our people instead of chasing something that was out of control.
Did dealers ask Mini for help in specific areas?
You may not hear this very often when it comes to dealer-brand relations, but considering the circumstances and the unknowns that were there, Mini did about as good a job as possible.
Whether it was signage or 6-feet apart stickers or helping us with contactless deliveries and in fixed operations, Mini was right there working with us from the very beginning, a wonderful partner to be with in this very difficult time.
Are Mini's production and inventory levels coming back in line with demand?
Inventory levels now across the Mini brand are much lower than pre-COVID levels. Some of that is normal schedule in the holiday-through-January period that goes on with European manufacturing. I believe by the time spring selling season hits, we'll have the right level of inventory.
Has lower inventory hurt sales and profits?
One thing COVID-19 has taught us is that we don't have to carry the huge inventory that dealers were encouraged to carry. When we have a right-sized inventory, customers have more urgency, gross on vehicles goes up, and overall the factory wins, and so do we. We hope we don't get back to pre-COVID levels, but hopefully we can find this new normal of inventory levels.
Are Mini retailers doing more dealer trades to get customers the models, colors and options they want?
Yes, we will absolutely dealer-trade. That does happen. However, when you pull into a dealer lot, and there's 50 Cooper Hardtops out there, if the right color is not out there, you're willing to stick around and wait for the right one because there's no real urgency. If you are a guest and you come into a Mini lot and there are five different cars and there's not a lot of different colors, your urgency goes up. You may change from a white to a silver. Guests are more willing to adapt to a car that is in stock than they were when you had so many cars.
Custom orders used to be a big part of the Mini buying experience. Are they still?
Ten years ago, I would say all Minis sold were preorders, custom-built. While we are not to that level, we definitely have more orders coming in where people are customizing their car and have it come in just the way they want it. When that happens, grosses are typically higher, and you'll have happier customers.
How is Mini dealer profitability? Has it returned to pre-COVID levels?
Dealer profitability is slightly better than pre-COVID. But a lot of that is based on integration with BMW, shared personnel with BMW. Stores were kind of forced to do that to survive through COVID-19. It was more cost-saving ideas that were made on the dealer side that have helped out on profitability of the brand.
Is Mini doing enough to help dealers promote certified pre-owned vehicles?
Mini is very good at helping dealers certify vehicles, and Mini has a wonderful certified program for the guests. What we certainly would love to see with Mini in general is more advertising of the brand, of CPO, just to let people know that these wonderful cars and products exist.
Is Mini adequately advising dealers on how to prepare for the era of mobility services, with electric vehicles and autonomous vehicles?
We just came out with the Mini Electric. Those vehicles were very well received, and all sold very, very quickly. From that standpoint of electric and what possible requirements may be coming, there's been some education. The great thing that BMW and Mini have done is set themselves up to be adaptable to the market. So if electric cars do completely take off, future products are available to be built with electric motors. If internal combustion engines are still popular in the Midwest and we still want gasoline-powered cars, we have the ability to do that. We are in that kind of wait-and-see what the market demands and where we go.
A year ago, you were bullish on the Mini Electric. Did it meet your expectations?
It surpassed them. You heard the range wasn't what you thought, and your instincts told you it was going to be a deterrent to the vehicle. However, the Mini team did a fabulous job pricing that vehicle, priced it very much in-market. And people want them. It's priced right, and it is a beautiful car. Most are driven just to and from work and in urban areas. We've had great demand on that vehicle. It is priced right, and we can't get enough of them. We'd love to have more inventory.
What's missing from the Mini lineup?
The most important thing is that Mini does stay Mini; you don't want to get too big.
One of the things we noticed with our guests is that they buy the car when they are in their 20s when they are single or newly married. Then they have kids, and the back seat space just gets a little too tight. Then we lose our guests until they become empty nesters. Then we gain them back again.
If we could get something a little bigger than the Countryman that gives us a little more rugged Mini look to it with a little more back seat room, I believe we would be able to keep a lot more of our family-stage customers within the brand.
The convertible continues to be a huge success for us, so continued evolution of the Mini convertible is certainly something we'd love to see.
It will be interesting to see what is next for the Clubman. I think the Clubman has run its course the way it is today. Some sort of revolution of that vehicle beyond the barn doors in the back is certainly within the brand. That's a section of the lineup that's missing right now.
What are the implications for Mini if there is a closer association with BMW?
In some of the messaging [in 2020], you heard, "Mini: Powered by BMW." You start associating that BMW is part of the Mini brand, and it pulls Mini up in the eyes of consumers. So many loyalists love the brand just the way it is. And how do you bring in other guests to experience it? That's the fun challenge of the brand we continue to work on.
There have been some gripes about how Mini's styling has drifted far from the original reborn 2002 model. Is that a reason why Mini has lost some momentum?
Over the years, Mini has been an affordable performance, everyman's performance, fun vehicle. But over the years, that price tag has continued to climb more and more. If there is anything pushing the Mini owner away, it's the MSRP. It has been pushed too far up the scale, and I believe that is one of the biggest things that the council is working on, getting the MSRP of the vehicles at the price where they are actually selling, not with discounts and incentives but what the Mini brand is retailing at. And that's where the MSRP should be. I think we are missing people when they see the price isn't what the perceived value is.
Can Mini be a premium car and have an affordable price?
I believe it can. There is way to have the car be premium and still be in the price range that doesn't push itself out of the scale. The Oxford Edition cars are very well equipped and, in my opinion, are priced more in line with where Mini should be priced. And the Oxfords have been a great success.
Mini's retention rate is unusually high.
Our retention rate remains very, very high. People who sell and service the car absolutely love the brand. I also think a lot of that has to do with the longevity and pride our service advisers and sales staff have in the brand. Every dealership I have been in, it's about the car, but it is also about the guests. There's an excitement from the staff when a customer pulls in with their Mini. People buy the car, keep them for a very long time and become part of the family.
Did the plunge in fuel prices hurt Mini?
Absolutely. Cars were all the rage when Mini launched. And like everything in our lives, there are peaks and valleys, and the pendulum always swings both ways.
Cars are still a very important part of our industry, and I think Mini is in a great position when you are seeing some of the other cars, such as the [Volkswagen] Beetle, that have been discontinued.
From a dealer network standpoint, dealers would certainly love to see more advertising. The feeling is, we have a great product that people love that people just don't know about. We need assistance getting the word out, with advertising dollars, both on the national and local levels to let people know these cars are out there.