Fleet News

Face to face: MINI Cherished seeks 'BMW-like' residuals

MINI is hopeful its range will achieve 'BMW-like' residual values as it prepares to launch its supercharged hot-hatch Cooper S in June.

The manufacturer forecasts that after three years/40,000 miles the MINI One will retain 47.5% of its £10,300 new price, while the MINI Cooper (£11,600) and the Cooper S (£14,500) will both retain 50% of their new prices.

These residual value predictions are based on the cars' base list prices – despite the fact MINI's research suggests that on average MINI One customers spend more than £1,370 on optional extras, and MINI Cooper customers £2,100.

Although the increased specification cannot be taken into account when predicting residual values, MINI general manager Trevor Houghton-Berry said they make the MINI an attractive proposition to used car buyers.

'These are well-specced cars that will be coming on to the market,' said Houghton-Berry. 'This is bound to have a positive effect on residual values, but we must make our predictions based on the list price, not on what the options may be. We see no reason why MINI shouldn't achieve BMW-like residual values.'

As part of MINI's aims to achieve the best price possible for its used vehicles, it has launched a used car programme called MINI Cherished.

The manufacturer says the programme 'gives buyers of used MINIs a complete package offering all-round peace of mind'.

The cars come with 12 months unlimited mileage warranty and Europe-wide emergency services, plus accident management throughout the car's life. As part of the accident management aspect, MINI says that in an accident, the damaged car will be taken to a manufacturer-approved bodyshop and the owner will receive a replacement car while it is being repaired.

MINI will also liaise with the insurance company and chase any uninsured losses or compensation for a personal injury.

This is part of MINI Cherished and will not require any extra fee.

In addition, the used MINIs will receive a free-of-charge full service, if one is due in the next 4,000 miles, and undergo an independent history and mileage check. A list of used cars will be available for potential customers to view at the www.minicherished.co.uk website.

Commenting on sales to date, from MINI's launch in July last year to March this year, Houghton-Berry said the company had expected to achieve sales of 19,450 units. However, it exceeded its target, reaching 21,210.

This year, the manufacturer aims to sell 25,000 cars in the UK with MINI One contributing 8,500 units, MINI Cooper 12,500 units and MINI Cooper S 4,000 units. Predictions on sales of the new Cooper S, launched on June 8, are 5,000 in 2003, 4,000 in 2004, 3,200 in 2005 and 2,700 in 2006.

Regarding corporate sales, Richard Webb, contract hire and leasing manager for BMW and MINI, said the company was now getting 'specific enquiries' from fleets just about the MINI.

'We are letting the brand and the product do the talking,' Webb said. 'It has massive user-chooser appeal and there are no plans to do any daily rental business, which will help protect residual values. There is a big demand for MINI.'

Among its fleet plus points, Webb added, MINI offers brand image and competitive wholelife costs.

Among its total customer base, including fleet and retail, only 4% of buyers have not taken up MINI's 'tender, loving care' tlc service and maintenance package that covers the car for five years/50,000 miles for a fee of just £100. Speaking exclusively to Fleet News, Houghton-Berry declined to reveal how much tlc actually costs MINI to deliver, but said the benefits - to both manufacturer and customer - outweighed that cost.

MINI tlc aims to allay any customer fears that running a MINI will cost 'an arm and a leg' because the company is owned by a premium manufacturer, said Houghton-Berry.

'It was important to have something that set MINI aside,' he said. 'There was a perception by some customers that it would cost an arm and a leg to run this car. It was important to support this car, so we said 'let's not do low-rate finance, let's do something different'.

Customers would be mad not to take us up on this offer and although I don't want to say how much it costs MINI, it is a worthwhile investment. It is great value to the customer and it also gives our dealers something to clinch deals with.'

Houghton-Berry said it was important that enough MINIs are produced at BMW's Oxford plant to meet demand, but on the other hand stressed the manufacturer would not create an 'overstock problem'.

'There is pressure on production capacity,' he said, 'and while that is a blessing in one respect, it needs managing in another.'

Houghton-Berry is keen that customers have to wait no longer than two months for delivery of their new MINI after the order has been placed.

'Waiting two months for a car is fine, but three or four months is unacceptable. In the UK alone, we are receiving 800 orders a week for MINI.'

Next year, MINI will launch a diesel model, followed by a cabriolet in 2004. It is expected that MINI will use the 75bhp 1.4-litre 16- valve diesel from Toyota that it produces for the Yaris, although it has yet to confirm this.

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