Mini Bucks the Downsizing Trend, Adding U.S. Dealerships

(MoneyWatch)  While Chrysler and General Motors throw thousands of excess U.S. dealers overboard, at least one brand, BMW's Mini, is bucking the trend and adding dealers in the United States, although it's on a much, much smaller scale.

Mini announced last week it will add 20 percent more U.S. dealerships, with plans for a big increase in sales, starting in 2011. Mini franchises are paired with BMW dealerships, since BMW owns both brands. With other brands tanking, especially the domestics, dealers are on the lookout for desirable franchises.

"We are pleased to be in a position to dramatically increase our U.S. dealerships," said Mini USA Vice President Jim McDowell.

Meanwhile, GM is cutting its U.S. dealer network by 42 percent, to about 3,605. Chrysler cut its dealerships 25 percent to 2,392.

Granted, Mini is operating on a microscopic scale versus Chrysler and GM. Twenty percent more Mini dealers is only 17 additional dealers. Even with the extra dealers, that's still a total of only 100 dealers in the U.S. market.

Through May, Mini's U.S. sales for 2009 were down 20.8 percent to 16,780, but the overall market was down 36.5 percent, so Mini's not doing too badly. Mini's U.S. sales in 2008 were a record 54,077, up 28.6 percent, while the rest of the U.S. market was down 18 percent.

Mini has signaled that it has a mini-crossover-SUV ?€"- make that a Mini crossover-SUV -- in the future product pipeline. I called it a "jumbo shrimp" in an earlier blog and worried that Mini might be trying too hard to be all things to all people. On the positive side, it probably doesn't cost much for Mini to spin variants off its basic platform. Mini already has three other body styles based on the Mini Cooper, a hardtop, a convertible and a three-door with rear cargo doors called the Clubman.

Besides adding new models, Mini will be able to support more U.S. dealers because its used-car volume and service and parts business have grown. That goes a long way toward making dealers profitable. BMW launched the revived Mini brand in the United States in 2002.