24 replies to this topic

[The_Mistro]

im sure i had heard this before!

it may have been a sales ploy! something as reveloutionary as the mini was at the time would need to break into the market, dont forget FWD, transverse engine etc, and selling at a loss would of helped BL gain a market share, and once people had started to accept the mini, sales were constant, they could start to rise the price of the mini and make money!

[The_Mistro]

I have just watched the episode on Iplayer, and to be honest i think it was a complete load of nonsense! we have engineering management lectures as part of my uni course, and i think it would make a good case study for unis to use! as only one bloke in there seemed to have an idea about what he was on about! the mini improved sales across the whole board! if you took sales of the mini out of the equation, even though they are making a loss, then the company could well make even more of a loss or even go from a profit into a loss! as there would be increased downtime at the factories, and would be overall less efficient!!

im going to be taking this series with a pinch of salt i think!

[Dan]

I'm sure someone once told me of a Bmc related car that came out the factory with drum brakes on one side and discs on the other

Not unusual, car factories make mistakes all the time. I know of a Corsa delivered to a dealership with one bodyside from a 3 door and the other from a 5 door. It wasn't noticed at all until the dealership went to clean it on the PDI.

[Ethel]

A design doomed to flog over 5 million of the little so 'n so's then

[minisilverbullet]

looking forward to watching this tonight!

I hope I can use it for the market and industry analysis class I teach at uni; can never have enough minis in my lectures!

I must say though I am very pessimistic about the mini being sold at a loss!

[Dan]

A design doomed to flog over 5 million of the little so 'n so's then

Exactly what I thought, doomed to have the second longest production run of any car, doomed to sell millions and keep the company afloat, doomed to survive several different company mergers and takeovers, doomed to be one of the reasons BMW bought Rover and to have the majority of parts still in production with specialist dealers trading very healthily 50 years after they started. Doomed to thrive essentially. Obviously the various companies were a right mess over the years, that goes without saying given what we all know happened. Mini would seem to have been one of their few successes though.

Still, whoever commissioned the program must be onto something, after all Coke and Persil are also clearly in desperate trouble after over 100 years of trading each, being at the top of their fields and recognised household brands for decades!

[mab01uk]

Once you have customers on waiting lists for a new car like the Mini, it does not make any sense to continue selling it at a loss.....whether you started it as a loss leader intentionally or not. Ford were selling the Anglia at £610 according to the programme so there was plenty of room for BMC to raise the Mini's price and still be cheaper. From the history books of what was happening at the time in BMC I think it was more likely the costing department and procedures were not as efficient or accurate as Ford. My own experience of working in engineering manufacturing for 30 years is that the methods used to calculate material, labour and factory overhead costs by different companies can be very complex and often seem to make little sense!

PS. In 1966 I remember my dad bought my mother a brand new Ford Anglia despite protests from myself and my brothers that he should get her a Mini......but he insisted Mini's were too small and too cramped under the bonnet to work on!

Edited by mab01uk, 10 May 2011 - 08:42 AM.

[Cooperman]

In 1966 I traded my 998 Cooper in for a new Mk.1 Cortina GT. The Cortina was much more suitable for use as a road car and the working space under the bonnet was superb after getting 'spanner rash' every time the Mini had to be fixed (weekly?).
I bought an 850 for my new wife the following year, trading in the Mini Van which we still had.
I never believed that BMC deliberately sold the Mini at a loss. The originals may have been at 'break-even' to gain market share, but by about 1962 the Mini was really selling everywhere and was, surely, profitable.
The 1100/1300 was also a success, but as for the rest of the range, that's another matter. Remember the Allegro? That was probably the worst car they ever built. We also had an early TR7, best described as 'a collection of spare parts in close formation '.
The biggest issue was that the unions would never agree to rationalisation and the labour gov't did not want to risk union unrest, so just kept on pouring public money in. When Thatcher came along and told them that they had to stand or fall on their own, the decline was unavoidable.
In all the debacle, the Mini was the car which stood out as a totally brilliant design which set the concept for all todays modern small cars.

[Dan]

It should be remembered that the Mini was not aimed at the Anglia or small saloon cars at all. It was created explicitly to get people out of bubble cars and into saloons. As such it had to be priced dramatically lower than other saloons both to buy and to run. It was intentionally the smallest proper car on the road. As Cooperman points out, why would you buy a car that was very small and built to a risky brand new design platform if for just a few quid more you could get a larger conventional saloon with proven engineering? We all know now that Minis aren't as small as they appear and are great fun but when it was brand new, nobody knew that. It was a bit bigger than a microcar and had to compete with them.

[998dave]

I would debate this story, we actually buy and strip down almost all of the competitor vehicles from the TATA nano, to BMW 3 series and everything is cost estimated.

Included in this calculation is the efficiencies of scale, which as a much bigger company then BMC we have quite a good hand on.

Also remember that while Longbridge was big, Ford were operating Dagenham, and more to the point the Rouge factory in Detroit.

Dave