The move might be in conjunction with an expansion of the network from the current 154 outlets, but will also be made to ensure the company has the right representation across the country.
Andy Hearn, Mini general manager, says BMW retailers remain his preference but, he adds: “If they can’t meet our expectations we will look outside the network. Not all BMW dealers will continue as Mini dealers – there will be some new people who come on board.”
BMW is one of a handful of carmakers who elected to sign their retailers on a fixed-term franchise contract under the revised Block Exemption regulations, instead of the rolling two-year contracts adopted by most. Those five-year agreements end in 2008, at which point BMW and Mini will release a new five-year contract, taking them to 2013.
By the end of this year, 90 of the 154 BMW/Mini retailers will have opened a separate showroom for Mini, as required by the carmaker. The remainder will have made the investment in standalone dealerships by the end of next year.
“The dealers that have separated the showroom have seen huge increases in profits,” says Hearn. He believes they should aim for at least 3% return on sales.
Mini is putting as much emphasis on used cars as new under its Cherished scheme. Next year Hearn expects 32,000 cars to be sold through Cherished. When added to the 47,000 new car target, that means 79,000 cars via the retail network. “I expect to see dealers selling 100,000 cars within the next two to three years,” he adds.
“New cars should be the icing on the cake, with overhead absorption on used.”
Hearn intends to spotlight database management next year, increasing the headcount of his field team to support dealers. He also intends to restructure bonuses to focus on sales performance, including conversion rates and enquiry follow-ups.