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brand strategy

The 2016 Mini ClubmanJeremy Sinek/The Globe and Mail

BMW's 1994 acquisition of Mini as part of Britain's Rover Group may not have been entirely a clear-eyed, rational business decision. BMW's CEO at the time was Bernd Pischetsrieder, a close relative of Alec Issigonis, the father of the original ground-breaking 1959 Mini. Coincidence?

Two decades later, BMW has long rid itself of the hapless Rover and perhaps less wisely, its Land Rover sister brand, but Mini has become a core asset.

Still, there are reasons to question the continuing need for Mini. In 2001, when the first modern, BMW-engineered Mini was born, it had a clear, strategic purpose. It let BMW sell small, fuel-efficient, front-wheel-drive cars to boost its corporate average fuel economy without tainting the sporty rear-wheel-drive dynamics at the core of BMW-ness.

Since, however, BMW has "seen the future." Sustainability has replaced sportiness on the front-burner. BMW launched its first FWD car last year, the 2 Series Active Tourer, based on a new architecture shared with the latest Mini; the company also created the first electric "i" cars.

Sharing FWD components with new and future BMWs cuts costs and enhances profitability for both brands. But that growing commonality also forces a rethink of Mini's role.

At a recent briefing, Mini officials spoke of realigning the Mini product and brand strategy, although one goal seems almost counter-intuitive, because it propels Mini into territory already well covered by BMW. As signalled by the all-new Clubman wagon, Mini plans to grow into the premium compact segment. It is sized similar to the VW Golf and, until now, all Minis have been subcompacts or smaller.

Peter Schwarzenbauer, the BMW AG board member responsible for Mini, says the premium compact segment is one of the fastest-growing and Mini is perfectly placed to exploit that trend. The physical size of the new Clubman, he says, hits the sweet spot, "but the car should not get any longer."

Future Minis will have more substance, be more premium. But, while Mini still targets the "creative classes," it must respond to a different zeitgeist, Schwarzenbauer says. In 2001, "the new millennium brought a willingness to break with convention." Today, "consumption is less of a priority. People question more what is the purpose of a product and what is the benefit for society. People are more focused on the essentials and Mini is ideally positioned."

Paradoxically, Schwarzenbauer also says today's customers are more likely to option up their Minis; he also expects a growing take rate for higher-performance Cooper S and JCW models.

There are no plans to greatly expand production volume, while the variety of core models will be reduced, to five. How will that look? To begin, the slow-selling coupe and roadster will not be replaced. For the rest, we already have the third-generation three-door/five-door hatchback (which together count as one core model). Item two is the aforementioned new Clubman, which sits on what project leader Ernst Fricke calls a "flat" version of the Active Tourer architecture.

The third model is likely to be a new Gen-3 convertible, and model four will be the next-generation Countryman/Paceman based on the taller Active Tourer platform. The fifth model? It might be a production version of last year's Superleggera speedster concept. Says Schwarzenbauer: "We're fighting hard to get it on the street, but it's not yet decided."

Otherwise, a different past Mini concept suggests an alternative fifth model – the Rocketman. Reintroducing a truly tiny city car is emotionally and philosophically a no-brainer; doing it cost-effectively would be the challenge. Still, the 2001 Mini was much smaller than the current three-door, and there is precedent for BMW using older architectures to keep costs down on entry-level models.

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