BMW to limit U.S. Mini sales in 2003

BY JEFF GREEN BLOOMBERG

WOODCLIFF LAKE, N.J. November 6, 2002; Jeff Green writing for Bloomberg News reports that Bayerische Motoren Werke AG plans to limit U.S. sales of its Mini small cars to about 24,000 next year to spur demand and keep resale values high, an executive for the brand said.

The German automaker this year expects sales of about 22,000 of the Mini Cooper cars in the U.S., where they debuted at the end of March, said Jack Pitney, the brand's U.S. general manager, in an interview. At the current pace, Mini could sell about 32,000 cars a year in the U.S., according to Autodata Corp.

"It's a brilliant strategy to keep the car in short supply," said Jim Hall, an analyst at AutoPacific Inc. in Southfield, Michigan. "You don't want to keep it in such short supply that people blow it off but they've done a good job of balancing it so far."

BMW, known for luxury vehicles, starts Mini prices at $16,975 and wants the cars to attract buyers who haven't previously bought the automaker's models. About 85 percent of Mini buyers hadn't purchased a BMW before, Pitney said. The Mini Cooper is intended to be the first of several models for the brand, and BMW can sell about 130,000 Minis worldwide next year, he said.

BMW, which sold 18,606 Minis in the U.S. through October, has buyers for about 75 percent of the cars before they reach U.S. showrooms, Pitney said. The short supply contributes to an Automobile Lease Guide estimate that 2002 Minis will retain about 61 percent of their value after three years, the highest rate for any U.S. vehicle from the model year.

"We don't want it to be on everyone's shopping list," Pitney said from Woodcliff Lake, New Jersey, where the automaker has its U.S. headquarters.

Sales Outlook

Mini may increase U.S. sales to 100,000 vehicles a year by 2010, when the brand is expected to have added models such as a convertible, a station wagon and maybe a pickup, said Chris Cedergren, an analyst at Thousand Oaks, California-based Nextrend, which tracks consumer trends.

"Right now if they had 60,000 available in the U.S. they'd blow them right out the door," he said.

The original Mini debuted in 1959 in the U.K. and was the inspiration for the naming of the miniskirt, according to BMW. The tiny car was fashionable in the U.K. during the 1960s, attracting buyers such as the Beatles' Paul McCartney and Ringo Starr, the automaker said. About 10,000 Minis were sold in the U.S. from 1960 until 1967.