Exec says MINI dealers will be in the black fast

Jack Pitney, general manager of BMW AG's MINI division, expects all 70 new U.S. dealers to finish in the black in the first year.

Each dealer will be allotted about 300 cars. The MINI already is on sale in England and will be available in the U.S. next March. The U.S. will get 20,000 units. The dealers have invested $250,000 to $400,000, exclusive of real estate.

Only BMW dealers were considered for MINI franchises, Mr. Pitney says. That's because they share some back office and personnel.

Each MINI dealer must have an exclusive sales environment, a dedicated manager, two dedicated sales people and a dedicated technician. A backup technician, parts person and service advisor may be shared with the BMW dealership.

The selected franchisees were culled from 150 applicants. None has a history of price gouging and all are well capitalized. The expected $18,000 price for the U.S. Mini provides for about a 10% margin, Mr. Pitney says. That compares with 14% for the BMW 3-series.