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Automotive Industry

Risking Brand Image With A New Brand - BMW Mini evaluation - Brief Article

Automotive Industries, Oct, 2000 by Ken Gross

BMW's new Mini is evocative, stylish, and affordable. But it's a shaky proposition for the U.S.

To the British, it's a national icon -- the car that's owned and loved by everyone from students to pop stars to royalty. To the Japanese, it's a cult classic with a sales niche all its own. To automotive history, its practical architecture -- wheels pushed out to the corners, transverse engine, front-wheel-drive -- influenced many popular cars.

And to Americans, it means next to nothing.

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It's the Mini. Over 5.3 million copies have been sold worldwide in the last 40 years. The Mini, however, is a virtual unknown in the U.S. Fewer than 10,000 examples of Sir Alex Issigonis' brilliantly conceived little coupe were sold here from 1960 to 1967. Americans were Beetle-crazy and the Mini's puny 10-inch wheels and intermittent Lucas sparks held scant appeal.

There are no fond, Beetle-like memories to rekindle when BMW brings its thoroughly modem Mini to the U.S. next year. But there are no expectations either. And that can offer great things if product and brand are right for the market.

BMW is creating its first separate brand for this $19,000 subcompact, built in a former Rover plant in Britain and powered by an engine co-designed with the former Chrysler Corp. Why? Because while the company remains strong upmarket, the class volume direction is down-market. Increasingly, BMW is under attack from Ferdinand Piech's Volkswagen Group as well as the traditional luxury contenders.

What they need now is a strong small car range. The company is developing its successor to the fabled 2002, a rear-drive program they refuse to call the 2-Series. First, though, comes the Mini, co-developed with Rover, and the only thing worth salvaging from BMV's failed takeover of the terminally-ill British automaker. Soon, the Germans will find out if keeping the nameplate was an astute decision or a regrettable one.

Like the original, the '02 Mini makes its own fashion statement. That's by design, says Mini Brand Marketing Manager Wolfgang Vollath. The car "is about open-mindedness and modem life," he opines. Vollath believes the high-zoot Mini Cooper version (initially the only model available in the U.S. and Canada) will lure new customers, aged 20 to 34, who cannot (yet) afford anew BMW. With a price predicted at $17,000 to $19,000, baby boomers might scoop up a few units too. BMWs U.S. planners hope for 20,000 units annually.

The Mini brand also spearheads a yet-to-be revealed e-commerce strategy for BMW dealers, about 75 of whom are said to be in the right locations for this car. Trendy New York, Miami and LA. are the logical key markets; Chicago may be the best hope for Mini sales in Middle America. Stores selected to handle Mini are required to have separate sales staffs, if not always separate showrooms, from the BMW business.

My prospects for this venture? The car is evocative, stylish, huggable and affordable. Insiders say the model range will include a supercharged performance version, a people mover, a van and a roadster.

But, overall, it's a shaky proposition. Don't get me wrong -- as a guy who's owned five Morgans, I really want to like the Mini. But I wonder whether BMW is bringing this car to the U.S. simply because (a) they've got it and (b) they're hearing Piech's footsteps getting closer. I wonder whether any small car built in Britain and exported to the U.S. really can be profitable, given the strong Pound.

The Mini brand's promises -- sportiness and style -- are straight out of BMW's play-book. Instead of trying to build a new brand with an unknown product, BMW should focus its efforts on a cheaper, but just as good, small Bimmer and save the separate marketing and advertising costs.

BMW's goal of selling 100,000 Minis annually, worldwide, is achievable without diluting its own carefully-built image in the U.S. The Mini brings that risk.

KEN GROSS is director of the Petersen Auto Museum in Los Angeles. A former brand manager of a global consumer goods company, Ken has written extensively about automobiles for three decades.

Automotive Industry

Risking Brand Image With A New Brand - BMW Mini evaluation - Brief Article

Automotive Industries, Oct, 2000 by Ken Gross

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