For Mini dealers, boosting profitability is top priority

With a majority of U.S. Mini stores losing money, dealers are pushing for new options to improve profitability.

Proposed solutions include spending more on advertising and making the vehicle markup more advantageous to dealerships, said Jason Willis, a member of the Mini National Dealer Council. Increasing residual values to help make leases more attractive is another possibility.

"Profitability has definitely been a challenge for the dealer network," said Willis, fixed operations director of the seven-brand Willis Auto Campus in Des Moines, Iowa. "A lot of our facilities have been built for that 100,000-car vision from a few years ago. ... We are working with Mini on options we can do together as a team to help dealers get back to a profitability state."

Mini sold 47,105 vehicles in the U.S. last year, a 9.5 percent drop. The brand's high-water mark in the U.S. was 66,502 vehicles in 2013.

Plunging sales have meant more tight negotiating to close deals, resulting in shrinking profit margins.

"The overall dealer profitability is worse in 2017 than it was in 2016," Willis said.

Mini went from 45 percent (56 of 124) of its dealerships being unprofitable in 2016 to 54 percent (69 of 127) of its stores losing money last year, according to figures provided by Willis.

Dealers expect to hear some news about their requests in April, when they are to meet with U.S. and global Mini executives in Las Vegas.

"There is a lot of negotiation taking place right now between Mini USA and headquarters over in Germany as far as what that marketing budget is," Willis said. "Our representatives here at Mini USA are definitely fighting for a bigger advertising budget, and we're hoping to hear good news."