BMW's board member in charge of Mini, Peter Schwarzenbauer, is reducing the brand’s range to five models -- dropping the slow-selling Roadster, Coupe and Paceman. Schwarzenbauer admits that the move is controversial because it runs counter to the belief that more models mean more volume. The former Porsche and Audi sales boss explained his objectives to Automotive News Europe Correspondent Christiaan Hetzner.
What was the reaction to cutting Mini to five models?
Overall, the auto industry is tending to occupy more and more niches to generate greater volume. Mini is a brand that will prove the opposite can also be effective. I believe it is good for a brand to concentrate on a few strong characters, but we should also be asking ourselves whether steadily increasing volumes is the only way to go. That’s something premium manufacturers in particular need to consider. To get back to your question: Yes, of course, there were some controversial internal discussions prior to the decision. But we now see that other manufacturers are also thinking about reducing the number of models.
What is the advantage of the change?
It is important that the models are clearly defined and our customers know what each model stands for. A wide range of different variants doesn’t make sense. We will concentrate on five core models, which we refer to as “superheroes.” Each superhero has a strong, independent character, which a well-trained salesman can match with a customer after just a brief conversation. By concentrating on a smaller range we can be more focused. I’m quite convinced of this. Now we will prove that this strategy works.
The first Minis made outside of Europe will be Countrymans assembled in Brazil from semiknockdown (SKD) kits. Where else might you build them?
We already build Minis in Brazil, Malaysia and Thailand for local markets. At the same time, our Oxford plant is – and will remain – the heart of Mini production. We also have additional production capacity at Magna Steyr in Austria and VDL Nedcar in the Netherlands. Beyond that, there are currently no plans to build or produce Minis at other locations.
Could you grow Mini even with China’s 25 percent import duties?
China is Mini’s fourth-largest market worldwide – we sold more than 30,000 vehicles there last year. Our business in China continues to grow. But we do not have any plans to localize Mini [production] in China.
How is Rolls-Royce’s order book given that China’s crackdown on conspicuous consumption has hurt overall luxury car sales?
We know that as fast-developing markets mature, they experience considerable fluctuations. Rolls-Royce is not immune to these market forces, but we take them into account in our planning cycle. We are confident that the Chinese luxury market will continue to grow in the future.
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What is the status of talks between Mini and engine partner PSA/Peugeot-Citroen?
For more than a decade, the BMW Group and PSA have enjoyed a successful collaboration regarding gasoline engines – this will continue until 2016. No further cooperation is currently planned. We are now working on our own engine modules that will also be used in the new Mini three-door and five-door variants.
Will contract manufacturer Magna Steyr build the next-generation Mini Countryman at its plant in Graz?
The BMW Group has had a successful collaboration with Magna since 2003 and regards them as a long-term strategic partner for vehicle development and contract manufacturing. The Mini Countryman has been produced there since 2010 and the Mini Paceman since 2012. The cooperation between the BMW Group and Magna Steyr will be extended when the current contract for manufacture of these two Mini models expires.
Dutch manufacturer VDL Nedcar builds Minis in Born. Would BMW Group consider buying that plant?
No. An acquisition of the plant to make it part of our manufacturing footprint is not under consideration. Contract manufacturing is an important instrument for the BMW Group and supports the flexibility of our worldwide production network with 29 plants in 14 countries. We can flexibly adjust production at Born to meet demand. We’re not currently planning any further expansion in capacity for Mini.
