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MINI Mulls Diesels for U.S. Market
The Mini brand is about to enter a new era. Unlike now, future Minis will be underpinned by parent BMW's new UKL (an acronym for the German words Unter Klasse) front-wheel-drive architecture, which will be shared with entry-level BMWs. Peter Schwarzenbauer, BMW's board member in charge of Mini, shared his view on the brand's future with Automotive News Europe Editor Luca Ciferri.
How many Mini variants will there be in the future?
With the new ULK architecture, we currently have in mind eight to 10 models.
Will all seven current Mini derivatives be replaced and do you have some fresh ideas for future Mini buyers?
Both options are possible right now.
BMW plans Mini production at the former Mitsubishi plant in the Netherlands now owned by Dutch contract manufacturer VDL. Which cars will be built there?
It is not decided yet in detail but it's basically additional capacity for us when we meet capacity restrictions at the main Mini plant in Oxford, England.
Will VDL begin with the third-generation Mini hatch?
This is one option.
Will it be a full-service production plant or assemble knockdown kits?
Complete production with press shop, body-in-white, paint shop and assembly. The engines will be made elsewhere, as happens with many plants.
What will Mini's total capacity be, including Oxford, VDL and contract manufacturing by Magna Steyr?
If I told you that I would be revealing exactly what our growth plans are. What I can say is that last year we produced and sold 300,000 units and right now we are expanding that capacity.
BMW and Mini models will be built on the same ULK architecture, so you now have the opportunity to build Minis in BMW plants in countries where sales volumes do not have to justify local production, such as the U.S., China and Latin America. Is that something you intend to do?
For the next couple of years we will focus on the three Mini factories we currently have [Oxford, VDL and Magna Steyr].
Schwarzenbauer: 'There will be electrification within the Mini brand, including a plug-in hybrid.'
Is Magna a long-term production center for Mini or will VDL meet all of your overflow capacity requirements in the future?
We are quite happy with the cooperation with Magna, which will remain a long-term strategic partner for contract manufacturing of BMW Group products in the future. It's also worth noting that we've invested 750 million euros in England, primarily in Oxford, to expand our capacity there.
Oxford last year built 210,000 units. How many cars will you be able to build there after the expansion?
Our maximum capacity in Oxford will be up to 240,000 units a year. As in all our plants, we can very flexibly adjust our actual production volume to the market demand, for example, with different working times and shift patterns.
Will the new three-cylinder gasoline and diesel engines be just for entry-level Minis or will they be offered in every model?
It's very difficult to predict the mix now. I think that consumers will be very surprised, and in a positive way, by the three-cylinder's performance, so I would expect that its share will go up quite a bit. But we still will see consumers asking for the four-cylinder engine. It would be wrong just to concentrate on the three-cylinder engine, even though it is a very attractive option.
Will Mini sell electric cars or leave that niche to the BMW i subbrand?
There will be electrification within the Mini brand, including a plug-in hybrid for certain. We're still investigating pure EVs.
Roughly how many Minis are diesels? And is diesel just for Europe?
Diesel accounts for 41 percent of our European sales. On a global basis, this share drops to 24 percent.
U.S. demand for diesels in German premium cars is rising. What will Mini do to take advantage of this trend?
I think that the U.S. market is ready for diesel engines now and this is something we definitely have to consider also for Mini.
Last year Mini sold a record 301,000 units. Will the changes to the core hatchback model permit you to set new sales records in 2013 and 2014?
For 2013, yes, that's my assumption – provided nothing strange happens in world politics or economy. In 2014, we want to continue to grow. But it will be a year of change, which will see the phase-out of the current generation and the ramp up of the new one.
Does Mini need to build cars in China, where many other premium brands are growing rapidly?
We have no plans for a factory in China. We will see how the premium subcompact segment develops there. Only about 10 percent of our global volume goes to China, which is still a very small proportion when compared with mainstream brands.
Why is the premium subcompact segment still in its infancy in China?
The Chinese market has developed in a different way to the rest of the world. Normally you start with mass-market production cars and then, slowly but surely, the premium brands come in as the market develops. In China it has been exactly the opposite, starting with premium brands and now slowly developing a more mass market. We are just at the beginning for Mini in China, but we do see a lot of potential for us there in the longer term.
When will there be full availability of the new-generation Mini?
It will go on sale in spring in both Europe and U.S., but as always the ramp up will be slow and full availability will probably be around summer.