They like things loose at Mini. One of the decorations at company headquarters is a cutout of U.S. brand boss Jim McDowell's head superimposed on an astronaut suit. Automotive News May 20, 2013 - 12:01 am ET WOODCLIFF LAKE, N.J. -- In 2005, three years after the Mini Cooper's surprisingly strong debut in the United States, brand executives wondered how many more buyers there could be for a 12-foot car. "When I first arrived in 2005, there was a question if Mini sales would decline," said Jim McDowell, 60, vice president of Mini USA. "If we had a few good couple chapters, would it continue?" BMW, Mini's parent company, had forecast U.S. sales of 20,000 units of the original two-door in 2003, but 36,000 were sold. That was the beginning of Mini's surprising journey, carving out a niche for an expensive subcompact in the land of SUVs and pickups. McDowell and his team kept Mini growing by rolling out variants, creating offbeat marketing and spending little on TV commercials. They built a tight dealer network mainly of carefully selected BMW dealers. And they quickly settled on an irreverent, even wacky, persona suited to buyers of what one dealership general manager calls "a happy car." The 500,000th Mini Cooper was sold April 2, just 10 days after the brand celebrated its 11th anniversary in the United States. Mini had prevailed. Others tried. The retro-styled Chrysler PT Cruiser peaked, fizzled and was dropped from the lineup. The second generation of the revived Volkswagen Beetle failed to sustain momentum. The anticipated threat from Toyota's Scion, a brand that promised to lure young buyers with hip cars, never materialized. Even the microcar Smart brand owned by Daimler AG failed to attract significant numbers of U.S. buyers. "They each had a peak and dropped off," McDowell said. "Mini has grown year after year. We never have had a huge burst of sales -- but sustainable growth." With a loyalty rate of 30 percent, high resale value and a three-year residual value close to 60 percent, Mini has become the brand to emulate for newcomers such as the Fiat 500. But Mini executives boast that no one is likely to be successful in copying the brand. "The unique selling proposition that Mini stands for -- the agility, versatility and fun to drive -- that excitement has not been able to translate to other brands," said Ludwig Willisch, CEO of BMW of North America. Alexander Edwards, president of the automotive division of research firm Strategic Vision in San Diego, agrees Mini is a hard brand to copy. Mini focused on a target audience that wanted a sporty car "in a compact, fun package," he said. The PT Cruiser didn't have the zip or the turning radius of the Mini, Edwards said. "The VW Beetle is cute but not sporty. The imagery and product cues were not specifically speaking to the target audience that Mini has captured." Changing dimensions Mini won't say how much it has spent on development in the past 11 years. The second-generation Mini debuted in the 2007 model year with a new chassis and sheet metal and a new generation of engines. But Mini also has performed engineering marvels with its variants. The two-door Cooper has been lengthened, widened, remolded -- even shortened -- into an additional six variants ranging from the two-seat soft-top Roadster to the five-door Countryman crossover. What hasn't changed much is the car's character. A Mini still has almost no overhangs, the wheels are pushed out to the corners and the front headlights bulge, giving it an unusual bulldog stance. With three variants of a 1.6-liter, four-cylinder engine, Minis still handle like little rockets and have the cornering ability of sports cars. "It is not like your average niche vehicle -- it is a performance vehicle," said Gary King, general manager of Mini of Peabody in Peabody, Mass. "It's a brand that enthusiasts have taken in as being cool and energetic. Mini is a happy car." Buyers also like the fuel economy ratings -- 32 mpg combined for the Cooper hardtop. The Toyota Prius hybrid, the darling of green consumers, is the car most cross-shopped with the Cooper, according to Mini. That may seem unlikely, but McDowell said Prius and Cooper buyers "have decided to do something outside the mainstream." Mini sales have grown from 24,590 in 2002 to 66,123 last year. By 2020, Mini will "easily grow" to 100,000 cars a year in the United States, McDowell said. The network has expanded from 70 dealerships, which were predominantly separate showrooms in BMW stores in 2002, to 117. By the time the third redesigned Mini Cooper goes on sale early next year, Mini will have 127 stores and another three under construction, McDowell said. Dealers say telling a shopper that BMW owns Mini and had a hand in vehicle engineering can help close a sale. "When you talk to folks on the showroom floor and tell them Mini and Rolls-Royce are subsidiaries of BMW, they start to put the pieces together," said James Cheatham, general manager of Mini of Stevens Creek in Santa Clara, Calif. "It is almost as though their eyes are opening to the notion of engineering prowess." That ability to sell BMW engineering in the small Mini will multiply with the next generation. For the first time, the redesigned Mini Cooper will be more German than British under the skin. It will use a BMW Group front-wheel-drive platform and BMW engines and components. "You will notice that it is a Mini, but a new-generation Mini," McDowell said. "We still have the ability to grow. In the next generation you will find we have even more interesting variants and there is more difference between the variants." 'You-ification' From the start, Mini executives knew the cars had to be unique, McDowell said. The Cooper with a 2002 base price of $16,850, including shipping, cost as much as a mid-sized car. That base price has been pushed up to $22,753 for the 2013 Cooper hardtop. "Our insights were people wanted a very individualized car," McDowell said. Mini even coined a term for it its individualization program -- "You-ification." Today, 25 to 30 percent of Mini buyers custom-order their cars and wait six to eight weeks for delivery. They spend on average, between $3,000 and $5,000 on options, according to dealers. Using unique colors was another way the brand differentiated itself. In 2005, like today, black, white and silver were the most popular car colors; Mini offered a wild hue called Purple Haze. McDowell estimated that Mini has been available in up to 75 exterior colors -- but never at the same time: "We are constantly, just as in the world of fashion, retiring some colors and introducing others. Going too far? It took Mini three years to roll out its second model, the convertible that debuted in 2005. But there was a four-year gap between that model and another variant. Mini wanted to do more models, but there were skeptics who thought the brand shouldn't venture too far out, McDowell said. "Some of our dealers were concerned that we were going beyond the hardtop and stretching the brand." McDowell's team felt that history showed it could work. The iconic British Mini made from 1959 to 2000 had many variants, including a pickup, a van and a buggy that resembled a Jeep Wrangler. "That's why it was so successful over such a long period of time," McDowell said. The second-generation Cooper spawned the Clubman in 2009, which was only nine inches longer than the hardtop. But the Clubman had five doors -- two on the passenger side, including a so-called suicide door, one on the driver side and rear "barn doors" that open to the sides instead of up like a traditional liftgate. "When you had all of the doors open, it looked like a Swiss Army knife," McDowell said. The Clubman was polarizing. Some dealers "were concerned that we were going beyond the hardtop and stretching the brand," he said. Sales of the Clubman have never topped 20 percent of the total mix. But it gave Mini the confidence to do more variants. "Everyone understood we needed to have a family of Minis," McDowell said. "I didn't think the Clubman was the biggest or riskiest step. The Countryman would be bigger." In 2010, Mini rolled out the five-door Countryman crossover. It was 6 inches longer, 5 inches wider and 4 inches taller than the Clubman, and all-wheel drive was optional. "We knew very often families who had a Mini had a more utilitarian car in the garage as well -- a Jeep or a Ford Explorer," McDowell said. "The question was how many of those people prefer something that drives like a go-cart but is not as big as what they are currently driving?" Source - http://www.autonews.com/article/20130520/RETAIL03/305209963#ixzz2TqI4f430