Mini struggles with Paceman, but will persist

BMW admits it is struggling to find a market position for the under-performing Mini Paceman coupe in Australia, but says it will soldier on nonetheless.

At the Paceman’s local release in early March this year, BMW said it expected to find at least 200 customers in its first year, but could only manage 93 to the end of October.

“We’re struggling with the positioning of that car,” Mr Horton admitted to GoAuto on the BMW X5 launch in New Zealand this week.

“But fortunately we are not pinned to a volume target, so we can tailor the volume to the market place.

“Yes, our original aspirations were higher than what we are seeing in terms of sales. But the Paceman will stay. It might generate a bit of a following over time, but it will always be a niche model for us… a very niche model for us.” While the best-selling Mini Hatch will be given an automatic boost with the long-awaited arrival of the all-new third-generation F56 series in Australia next March or April (after a November 18 global unveiling in Oxford), moving more Countryman crossover SUV stock will remain a challenge.

To the end of October, only 431 units were sold. In its VFACTS $40,000-plus Small SUV classification alongside the Audi Q3 and BMW X1, the Austrian-built Mini crossover/wagon could only manage a sub-10 per cent market share against the others’ 54 and 36 per cent results respectively.

In Australia the Countryman retails from $34,100 to just under $50,000 before on-road costs, but in Europe it enjoys more success partly due to its more mainstream pricing.

Nevertheless, despite all of this, Mr Horton said BMW has no plans to release a sub-$30,000 entry-level model to boost sales, stating that he is keen to retain the Countryman’s premium visual, packaging, and dynamic characteristics against more humdrum contenders.

“The Countryman is positioned as quite a premium product, compared to say in the UK, where it is a much more established and much more of a volume product,” he said.

“If you start trying to bring in lower-specced or lower-powered cars, then the customer doesn’t really want that either. So it is a bit of a challenge from that point of view.

“There is possibly that potential (to do a more entry-level Countryman), but then there are so many competitors that do ‘utilitarian’ so much better at a much lower price point.

“When you look at the small SUV market, particularly when you look at the (Volkswagen) Tiguan, that car does that whole utilitarian and the space side of it better than Countryman, and does it at a significantly cheaper price point.

“If you start chasing something like the Tiguan down that market then we’re almost doomed to failure, so we’d rather keep the volume sort of where it is, grow it organically with people coming out of Mini hatch and into Countryman, rather than trying to tackle something like the Tiguan head-on.

“It has a lot of functionality, and in some markets you could get away with a more utilitarian version of the Countryman, but I am not convinced that is the way that we should position it in Australia.

“Mini is still very much focussed on the original hatchback concept. Countryman is picking up, as people see more of them on the road, it is getting more appeal.

“It is a very core player for Mini, and we’ll just continue to put the focus on that car.” Finally, Mr Horton is keen to maintain the separation between the Mini and BMW marques in the marketplace.

This comes after the confirmation this week of BMW’s Compact Activity Tourer’s late-2014 Australian debut as the company’s Mercedes-Benz B-Class competitor.

Besides being the first BMW-badged front-wheel drive in history, the F45-series model expected to be called the 1 Series GT is said to share much of its UKL1 architecture and some drivetrain elements with new F56 Mini, raising the spectre of a closer involvement between the brands in some circles.

“We would dearly look to try and keep the (BMW and Mini) brands separate, and in fact if anything the company would like to have more separation in the future, pushing the two brands apart,” he said.