R50/53 Any ideas for MINI's reason for cutbacks in production numbe
1st Gear
Joined: Feb 2003
Posts: 40
Likes: 0
From: Geneva, Switzerland
ckcook wrote:
If MINI does their allocation at the same time as their BMWs, then a more scarce MINI could give BMW district managers leverage to move some BMWs to their dealerships.
Manufacturers do this stuff all the time. A dealership wants 10 MINIs. No problem. All he has to do is take 20 X5s too. You only want 10 X5s. No problem. I'll allocate you 3 MINIs.
The manufacturer's only obligation to the dealerships is to provide them with a "fair" number of cars. How fair is determined differs from manufacturer to manufacturer, but sales and availability are the major factors. (note that service is generally not a consideration in allocation).
If MINI does their allocation at the same time as their BMWs, then a more scarce MINI could give BMW district managers leverage to move some BMWs to their dealerships.
Manufacturers do this stuff all the time. A dealership wants 10 MINIs. No problem. All he has to do is take 20 X5s too. You only want 10 X5s. No problem. I'll allocate you 3 MINIs.
The manufacturer's only obligation to the dealerships is to provide them with a "fair" number of cars. How fair is determined differs from manufacturer to manufacturer, but sales and availability are the major factors. (note that service is generally not a consideration in allocation).
(Disclaimer: I'm not an attorney and I don't play one on TV. However, I work in a similar industry.)
If manufacturers are offering to sell Minis only if X5s are ordered, it would be a very risky for a manufacturer who is doing business in the US.
This practice is a violation of a US federal antitrust law called the Clayton Act. Section 3 makes it illegal to engage in "tie-in" sales.
This means that it is illegal for to engage in deals which unfairly restrict the purchase of desireable products (i.e. Minis) unless a customer buys another product with a seperate function (X5).
This practice could be ruled illegal if it is found to harm competition.
See the section called "Tying Arrangements"at summary of antitrust laws.
Having said that... any time demand exceeds supply for a product, manufacturers must make decisions on allocation of available units. If most Minis are being ordered and built to customer spec, I doubt that there is a tremendous amount of allocation going on. Delivery times just get longer and longer.
4th Gear
Joined: Dec 2002
Posts: 548
Likes: 1
From: Cramerton, NC
It could also be detrimental to BMW's efforts at keeping the MINI a separate brand. There is a disconnect if BMW claims that the MINI dealership is a separate entity, yet they link allocation requirements for BMW vehicles to MINI allocation. It would be like Ford requiring that dealers take 10 Mustangs in order to get three Volvo's.
Ford dealers don't sell Volvos, and SUPPOSEDLY, BMW dealers don't sell MINI's.
See ya,
JS
Ford dealers don't sell Volvos, and SUPPOSEDLY, BMW dealers don't sell MINI's.
See ya,
JS
1st Gear
Joined: Aug 2002
Posts: 32
Likes: 0
From: Duluth, Ga.
>>. I wonder if some dealers are banking on making more money when MINI owners go to buy a new car and maybe trade up to a Beemer instead of a MINI
I went from a '97 328is to my MCS. The BMW was nice, but there are so many in the Atlanta area, the looks of the car grow old fast. The car was so quite and smooth, at times it was just boring. Miss it a little on long trips.
I went from a '97 328is to my MCS. The BMW was nice, but there are so many in the Atlanta area, the looks of the car grow old fast. The car was so quite and smooth, at times it was just boring. Miss it a little on long trips.
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