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BMW snubs MINI gossip

2007-07-19 14:43
BMW denied on Wednesday a report in Germany's manager magazine that its cult brand Mini, which was just recently revamped, was struggling to make a profit.

"BMW makes money with the Mini," a spokesperson for the premium carmaker said.

Manager magazine wrote in an advance copy of its Friday edition that some people at BMW are in favour of producing a Mini sport utility vehicle due in 2010 on a joint platform with the A-Class made by BMW's archrival, Mercedes-Benz.

It said the reason for the unofficial talks with Mercedes over joint Mini/A-Class production was the current difficulty BMW had to pull Mini back into the black, and that the brand would be close to posting a loss even if Mini's Oxford plant in central England were to produce at full capacity.

The introduction of the Mini in 2001 was a resounding success for BMW, which only last year expanded its Oxford plant to rev up sales of the second generation model, rolled out in mid-November, to about 240 000 units come next year.

BMW has repeatedly stated in the past that it made money with each Mini sold - a rare feat considering it had to invest in building a totally new car and reviving a discontinued brand - and analysts have expected the new, revamped Mini to expand its profit margins further.

Mercedes meanwhile suffered year after year of heavy losses at its Smart brand to prop up sales of now defunct models like the ForFour, and the booming demand for the Mini played a key role in propelling BMW past Mercedes to take the crown as the world's largest premium carmaker.

Buoyant demand for the British retro-car may have even played a role in Fiat's decision to build an updated version of its cult Cinquecento model first introduced in 1957. Launched this month, the car is expected by some analysts and industry observers to duplicate the Mini's success.

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