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Fri, May 09, 2003 - Page 12 News List

Mini USA makes a quick name for itself, profitably

RETRO SUCCESS STORY The British Icon Mini, now a BMW subsidiary, has beaten all of the odds to develop a niche market in the US. Should it expand?

AP , DETROIT

Mini USA says its first-year US sales exceeded expectations by 50 percent and its brand awareness grew significantly, but the British-based automaker has no plans for mega-growth as yet.

Jack Pitney, Mini USA's general manager, said Wednesday the company sold 30,000 of the born-again versions of the British icon in its first year, which ended March 22, though dealers could have sold more.

But Pitney, who spoke to Detroit's Automotive Press Association, said the company's business plan is as unique as the boxy Mini Cooper itself, the favored ride of cinema sleuth Austin Powers and singer Madonna.

At a time when many automakers are spewing no-interest loans and cash rebates to move inventory, Mini is content to keep annual sales at between 25,000 to 30,000 vehicles over the next few years, Pitney said in an interview before his presentation.

"It's an approach that allows our dealers to be profitable, us to be profitable and at the same time not overextend ourselves," he said.

The company makes two, four-seat cars, the Mini Cooper and higher-performance Mini Cooper S, both of which sell for under US$20,000. Industry observers expect Mini to introduce a convertible in the next year or so, but Pitney declined to discuss the prospects.

He said Mini USA's immediate challenge is trying to emulate the car's overseas icon status while maintaining a sales pace that satisfies the company, dealers and customers alike.

"We don't want to become the flavor of the month, then hit the downside of the bell curve," Pitney said. "We and our dealers have bought into the same philosophy: `Let's take it slow.'"

Of course, operating with a mini-marketing budget makes that approach a bit easier. Mini USA, part of the BMW family, launched its brand in March last year without a national television advertising campaign.

Instead, the company used such tactics as parading the 4m car atop sport utility vehicles to garner interest. Mini also appeared in a staged "centerfold" ad in Playboy magazine.

By December, Mini officials said, brand recognition had grown from nil to 53 percent. In January, the Mini Cooper was named the 2003 North American Car of the Year at the North American International Auto Show. On Tuesday, in J.D. Power and Associates' latest initial quality study, Mini ranked 32nd out of 36 nameplates in the survey.

Mike Wall, an industry analyst with CSM Worldwide, said Mini's unusual approach appears to be paying off. He said the resale value is about 64 percent, one of the highest around, and demand remains strong.

He said Chrysler's PT Cruiser and Volkswagen's Beetle are both examples of cars that saw heavy initial demand fall off after production was ramped up.

"Mini could come out of the gate and build 200,000, but you ruin the cachet," Wall said. "I have a tough time finding fault in their philosophy because it seems to be profitable."

Warren Waugh, the owner of Mini of Peabody near Boston, said he has no complaints after leading the company in sales last year.

"I really think dealers who can and will sell the cars will also get the cars," he said. "What's key is keeping it special. If all of a sudden everyone can have a Mini Cooper, it's going to take the bloom off the rose."

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