BMW is preparing to breathe a new lease of life into one of Britain’s most famous motoring icons, the Mini. The German company, which last year faced a barrage of criticism over its handling of the Rover crisis, has invested £200m in the new Mini, which is to be launched at the beginning of July.
As the last of the unfinished business from last year’s demerger from Rover, the launch will be closely observed both by the media and rival car companies.
BMW has set itself an ambitious target of selling about 20,000 Minis in the UK this year. While most critics say the new car – which is half a metre longer than the old Mini – has much going for it, the “supermini” segment of the market is already crowded. The new Mini will have to compete not only with mass-market cars such as the Renault Clio, but also with luxury brands like the Mercedes A-Class and the Audi A2.
When BMW finally got rid of Rover last year, it retained the Mini brand, along with the Cowley factory in Oxford, as a memento of what had been a momentous debacle for the company.
The launch of the new Mini will be the second time the German car company has tried to relaunch a British marque. Hopefully, BMW will have learned a lesson from the Rover 75 launch at the Birmingham International Motor Show in 1998. Bernd Pischetsrieder, former chairman of BMW, took the stage criticising Rover, casting doubts over its future, and sweeping away the jubilation of the car’s launch. Rover never recovered and was dubbed “the English Patient” by the media.
Priced out of the market
Even with the care it is taking this time, some of the industry’s top management say there are flaws in BMW’s plans.
The company originally planned to sell the Mini for about £14,000. Such a move would have repeated the mistake made by Volkswagen when it launched the new Beetle two years ago. With a price tag of £15,000, the Beetle is outside the price range of many people in its target market. BMW has now been forced to rethink, and the basic car – called Mini One – will cost just over £10,000 on the road, rising to £11,600 for the Mini Cooper. A Mini Cooper S is planned for next year, but BMW will not confirm its price.
One senior industry figure says that, even with the lower price tag, BMW is going to find it difficult to achieve its sales target: “Even if the car is a cracking little product, I think BMW is underestimating the competition, and how fickle consumers can be.”
Critics are also astounded that, at a time when most models are updated every two or three years, BMW does not plan to “freshen” the Mini for at least seven years. They claim that as a “fashion” vehicle, the Mini is likely to have a short shelf life and BMW will struggle to make any money from the car.
But Mini’s marketing manager Emma Scammell insists that “the business model set up by BMW will mean it makes money out of the Mini”.
Her claims are backed by Cardiff Business School’s head of automotive economics, Professor Garel Rhys. “BMW is not going to catch a cold with the Mini,” he says. “The original price for the car was outrageous, but this new price is still no giveaway.”
Professor Rhys claims BMW is toying with the idea of expanding the Mini range: “It will definitely look at how far up the size range it can go. We could see an MPV, a 4×4 version with a bigger body shell and perhaps a small pick-up truck for the US market.”
Getting the product to market
However, there are reports that BMW is having problems with the number of sales outlets for the Mini. The car is to be sold in 134 outlets, mostly located in BMW dealerships, although there will be a few high-street outlets exclusively for the Mini.
Originally, when BMW still owned Rover, the car was to be sold through Rover’s much larger network of dealers. Some critics feel this would have worked better for BMW, because its own showroom staff do not have experience of selling lower-priced cars such as the Mini. The pressure on these dealerships is also a cause for concern as, to meet this year’s sales targets, each dealership will have to sell about 149 Minis.
“The dealers are up for it,” argues Scammell. “We have created separate areas in the dealerships for the car, not just stuck it in a corner of the showroom. We also have dedicated staff who will have nothing to do with selling BMWs.”
Trying to live up to a brand heritage that has an unrivalled position in motorists’ hearts and is quintessentially British, the German car manufacturer could struggle to recapture the buzz that surrounded the Mini’s first launch 40 years ago.
The car’s success at the Monte Carlo Rallies in the Sixties and its association with cult film The Italian Job are forever etched in British minds.
According to Scammell, BMW will try to move on from the car’s history rather than re-enact past glories.
“People look at the old Mini with rose-tinted spectacles, but they don’t want to go back,” says Scammell. “We believe that it would be very lazy and cynical of us to borrow that heritage.”
The Mini will be launched in the UK on July 7, two months ahead of its European launch, and about eight months ahead of the US and Japan. The launch is being backed by a £10m advertising campaign. This is more than BMW spends on its own model launches, indicating the significance the company is placing on the Mini.
To reflect the importance of the UK market, London agency WCRS will handle advertising for the UK launch, while German-based Jung Von Matt has picked up the global account.
Who will buy my beautiful Mini?
As if it were not challenge enough to recreate some of the mania surrounding the old Mini without drawing too much on its past, BMW faces a further problem: selling a car that does not have a specific target market.
In order to meet its ambitious sales targets and reclaim some of its investment this year, BMW has a few short weeks to convince the British public to adopt this German reincarnation of a popular UK icon. A second failure to re-establish a British car brand could have momentous consequences for BMW’s future independence.