The Mini Cooper's Rep's a Pooper

...but at least it has damn good advertising. Story here.

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Mini’s rep hasn’t scared sales
Commentary by Doron LevinMay 27, 2003
Since quality often is a deciding factor for choosing one car brand over another, the new Mini — ranked among the 10 most defective brands in a new survey — ought to be dying on the vine.

Yet the diminutive Mini Cooper, built in England by Bayerische Motoren Werke AG, remains one of the hottest selling cars in the U.S. Among the owners is singer and actress Madonna. The Mini exceeds initial projections and remains in short supply, suggesting that clever marketing can more than overcome other, sometimes serious, drawbacks.

On May 6, the highly regarded J.D. Power & Associates survey of initial quality ranked the Mini 25th of 28 brands, with 166 consumer complaints per 100 vehicles sold, compared with an industry average of 133 complaints.

A few days earlier, the Mini posted April retail sales of 3,121, nearly double last April’s 1,559. The car is on track to sell 30,000 this year, the company says, compared with earlier projections of 20,000 to 25,000 annually. (In a market of 16.5 million new vehicles, this is a relatively small number.)

Worldwide the model sold 144,000 in 2002, including, 34,715 in Great Britain. Recently, at BMW’s annual meeting in Munich, Helmut Panke, chairman of BMW’s board of management, announced that the company will bring out a diesel version of the Mini in Italy and Germany soon, and a convertible version in the middle of next year. That model probably will arrive in the U.S. by the summer of 2004.

The first Mini was built as a response to the anticipated loss of Middle Eastern oil after the 1956 Suez crisis. In the 1960s, the Mini was hip, the favored carriage of musician John Lennon and actor Peter Sellers. BMW bought Rover PLC in 1994, a mostly disastrous acquisition that begat this one successful model.

“This car offers something for everybody, if you’re looking for styling or performance or a car that fits into a tight parking spot,” said Warren Waugh, owner of a Mini dealership in Peabody, Mass.

Waugh said he’s unworried about quality glitches, such as the cracks that appeared on windshields or the shifter on the manual transmission that popped out of gear on some vehicles. “Mini has fixed absolutely everything,” he said. “The company has been very responsive.’

Internet chat rooms like the one at www.edmunds.com are full of stories about defects, posted by Mini owners.

Jack Pitney, general manager of BMW’s MINI USA subsidiary, knew in early 2001 that he wasn’t getting the budget to blanket the airwaves with TV commercials so he could familiarize drivers with an unfamiliar brand. What he carried out instead was a classic exercise in guerrilla marketing, hit-and-run tactics to gain attention. In other words, publicity stunts.

The automaker, for example, bought a Ford Excursion, the extra-large sport utility vehicle, and placed a 2,600-pound Mini on its specially built roof rack, with a sign that read: “What are you doing for fun this weekend?”

“It really stopped traffic every time we drove it around,” said Pitney. “We handed out hundreds of thousands of business cards telling people to go to www.miniusa.com. I call this a viral approach.” Apparently the strategy worked.

Pitney blames the car’s low J.D. Power rating mostly on a poorly designed cupholder. “That was the number one complaint, that you could get a soda can into it, but it wouldn’t hold a large latte from Starbuck’s.”

When the cupholder trouble began to appear, the automaker swung into action, Pitney said, designing and manufacturing a larger insulated mug that fit into the cupholder and would accommodate more fluid. So far, the automaker has mailed more than 30,000 mugs to owners.

“The stuff they’ve done is so smart,” said Eddie Alterman, an editor of Automobile magazine. “They’ve cut across socioeconomic lines, kids and older people are buying, rich and less affluent.” The Mini Cooper’s price starts at $16,975 and rises to about $20,000 for the more powerful Mini Cooper S model.

Waugh, the dealer in Peabody, said he’s taken several Volkswagen Beetles in trade for new Minis. “More men are buying Mini than women,” he said, by a 65 percent margin. “Volkswagen made a mistake by putting a flower vase on the dashboard. The Beetle became known” as a car for women.

The more powerful Mini Cooper S is regarded as masculine, he said. Automotive marketing dogma holds that women are willing to consider a vehicle perceived as masculine, but men avoid cars regarded as feminine.

Neither men nor women — nor Madonna — will be interested for long in buying cars that need constant repair. Whatever they’re saying publicly, Mini executives must be scrambling for a better score on next year’s J.D. Power survey.

Great marketing can overcome defects for a time, not forever.

Doron Levin is a columnist for Bloomberg News.