Mini's wild ride
How BMW's tiny two-seater blew past its original sales targets.
NEW YORK (FORTUNE) -- One of the more unlikely automotive success stories of the past decade has been the rise of Mini. Now with gasoline prices high, the appeal of the tiny cars is stronger than ever.
Last year, Mini, which is owned by BMW and builds its cars in England, outsold Saab, Porsche, and Jaguar in the United States. Sales are down slightly this year as the factory retools but the waiting list of potential buyers remains as long as ever.
Mini's U.S. boss Jim McDowell tried to explain the Mini phenomenon at a recent meeting of the International Motor Press Association in New York. Some edited excerpts:
"I remember when we were in focus groups, before we ever made a commitment that we were going to bring Mini to the United States, and people found it just impossibly small. They couldn't imagine why anybody would want that astonishingly small car.
But what we discovered was, there was a very small subset of the population that said, 'You know what? That is one of the most cool things I have ever seen.'
And when we talked with them about what they potentially could do to customize and make it their own car, that got people really excited. In a world where so much of what we have is mass-produced, a Mini is something completely different because it is your canvas. You can decide from your canvas exactly what colors, features, what interior treatments.
And a lot of folks don't just stop with the stuff that we supply. They keep on adding to it themselves. One of the remarkable surprises about the Mini franchise is how many people come in for their free oil change and they leave $1,000 later with that much more accessories to their car because they saw all this cool stuff in the showroom.
I do have to tell you an absolutely remarkable feat: We are more than four years into this franchise, and unlike the rest of the automotive industry, we have not paid a consumer incentive. We have always been able to have that much more demand than there was supply, and since the car itself offers inherently so much value, negotiating on price isn't the topic it normally is in the car industry. Negotiating in terms of 'How can I get exactly the vehicle I configured on the computer?' is.
What you'll find is depending upon the season, 50 percent to 70 percent of our buyers configure their car on the Internet, [and then] go to the dealer to say 'I want you to build this car precisely for me.' Some of them wait for up to year for the car to be delivered.
That isn't the typical situation -- very commonly people wait three months -- but that just shows the level of dedication and excitement that people have towards their Mini.
One of the things that is fun about this job is the customers come find us. We don't have to do focus groups and the like; we have a lot of regular contact with our customers. They feel like their cars are an extension of their family, an extension of themselves.
When we get together with Mini owners, it is so important for them to [tell us] why they specified the car that they did, what feature they like the most, if they could add anything to it, what they would add. And many of them want to tell us the whole history: 'My first Mini was in 2002. I loved that car for two years. Then the convertible came out. And I traded it in on a convertible, and that is wonderful, but now I've seen pictures of the new one. So tell me when that's going to come out because that's probably the next one we're going to want to add.'
It turns out it is not just the U.S. that has done better than we might have expected -- most of the major markets around the world have. Now we're the second largest market. The UK is the largest but only by a couple of thousand units. We really are catching up fast.
We didn't have this tradition with Mini from the prior historic car that the Europeans did. We sold over the entire history of the prior Mini 10,000 of those cars in the U.S.
Our business plan thought that we would take seven years to sell the first 100,000 cars. Actually we did that in three and a half years. And at the end of April we just delivered our 150,000th Mini in the U.S. So the plan is really taking hold."