Mini, the iconic British brand, has been under the umbrella of BMW for just over 18 years and now boasts a 70% finance penetration rate. Richard Brown took the opportunity to ask Joe Pattinson, marketing manager of BMW Financial Services, why such a small car packs such a big punch in F&I.

Small cars, city cars, sporty cars, superminis, sub-families; whatever they are called, they are pretty popular right now. According to the Society of Motor Manufacturers and Traders, the mini segment grew 82.5% year-on-year in June and 93.4% in July.

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The Mini brand itself has been a touchstone of British culture for 50 years: Originally the car for everybody from the Rover Group, Mini Radfords and GTs were seen being driven around by The Beatles, thrown around Turin by Michael Caine or tootling along with Mr Bean on top.

Then BMW took ownership of the Rover Group. At the time, there was uproar in the House of Commons. Now Mini is the sole remanant of the deal, a brand renewed with soaring sales, aspirational styling and an emphasis on contemporary British pride.

Lily Allen drives one, so does Noel Gallagher. Latest advert campaigns have emphasised the Union Jack livery of models and put a Mini in the shop window of Harrod’s. Now BMW has invested £250m in Mini production in the UK, making the flagship plant in Oxford the second biggest car factory in the country.

Richard Brown: The retro-classic-trendy-small-sporty car sector, why is it so popular now?

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Joe Pattinson: There’s a number of things. Obviously, people are downsizing. What they’re able to do with cars like the Mini is downsize but retain a premium vehicle.

It didn’t use to be so. Going back a few years, there weren’t cars in that segment.

Now, obviously, with Mini, you can get a premium car with the accessories and options you expect on what would have been a premium saloon.

I think people are looking at running costs in general, and especially fuel costs.

The Mini is unique in that it appeals to all types of people, of all ages. People remember having them, the older generation, when they learned to drive.

People remember being picked up in them or their parents having them.

It’s interesting when you work on the stands at different motor shows with Mini, everyone comes up to you, and they’ve always got a story about a Mini. Always got a story they can recount from back in the ‘60s, about the first car they had, the first car they modified.

That’s the other point, the customisable nature of it. Mini was the leader of that and now other manufacturers have adopted that.

Certainly with Mini you very, very rarely see two that are exactly the same, the same spec. That has a big appeal to people.

RB: In general, these are small but premium cars, isn’t that a contradiction at retail?

JP: No, I don’t think so at all. It’s no contradiction. If you drive and experience a Mini, the quality of the car is certainly there in terms of a premium product.

It’s very high quality engineering that goes in to it, second to none.

It’s great to drive and it certainly has a premium feel. The whole experience, the purchase experience, the customer experience is something you’d expect from a premium brand.

RB: How have Mini sales been in the UK?

JP: Good. What we’re seeing is that people are looking at fuel costs and efficient cars, so they look at downsizing.

However, we’re seeing that some of the finance offers that we have in place are attracting people that previously would have thought they couldn’t afford a Mini.

They have now realised that, actually, Minis are affordable.

They realise that because of the great residual values on Minis. They have always been strong which means that you can have affordable monthly payments.

We’ve also attracted more people in to the cars on finance that previously would have gone to other lenders. There’s the attraction of financing it all in one place, which is good for us and for the brand.

Also people are realising the benefits of PCP and running cars that are more modern.

Whereas previously we’d have seen younger people perhaps buy an older vehicle, they’ve now recognised that buying an older vehicle means you’ve got a lot of maintenance, you’ve got to have MOTs, and they’re not as fuel efficient.

People are realising they have to buy a new car and do see benefits in terms of fuel efficiency, in terms of the latest safety, in terms of it being under warranty.

We’ve also launched some very interesting products. We’ve got Mini 50/50 at the moment which, again, other manufacturers have tended to use in the past, but we’ve put it on to Mini.

We thought Mini would be a good vehicle to have 50/50. This is where you pay half the price of the Mini upfront, you pay nothing for two years, and then you can chose to pay the other half and keep the car or you can return the car. That’s working really well for us, particularly at the performance end of the Mini range.

RB: What’s finance penetration like?

JP: Finance penetration as a rule is very high. We’re talking over 70% finance penetration for Mini, very strong.

It’s really going great guns and shows no sign of waning.

RB:How does finance on Minis compare to finance on BMWs?

JP: The similarities are that both Mini and BMW customers expect to receive a premium level of service and they expect to have a pleasant and engaging buying experience.

The differences would be that Mini customers would tend to want to add a lot more personalisation to cars, a lot of different options and accessories, whereas for BMW drivers, there’s not so much variety about the personalisation.

Other than that, it’s very similar. The buying processes are pretty similar.

We are seeing, again, more and more people seeing the benefit of taking their finance from the dealer network, taking advantage of the offers in place at the moment on the cars and that works really well.

RB: There has been a variety of Mini models and model versions launched recently, or soon to be launched: The John Cooper Works GP and the Clubmans, etc. Which of these are at retail?

JP: You’ve got the hatchback, which is the first car that was launched.

Then you’ve got the convertible version of that and there’s also the Clubman, which is the five-door version, and then you’ve got the Clubman which is the SUV-type car, and then the recently-launched Coupe and Roadster, so they’re the two-seater versions.

There are John Cooper Works versions of all those vehicles, which is the equivalent of the BMW M.

RB: How do you predict new Mini models and concepts will do?

JP: Good, again, it’s all about demonstrating the affordability of the cars.

We like to make sure we always have a finance example available on quotes so people can see how much they are on a monthly basis.

I certainly believe that people buy cars on a monthly payment. I don’t think people have in their heads what £16,000 is, it’s a nebulous number.

People need to see what that translates to. People work on a basis of ‘How much money have I got to spend each month?’ They don’t work on that basis of £16,000. It’s about translating these figures in to monthly payments. We have finance available on all these models. What we tend to do is we’ll pick certain ones and advertise but the finance is available on all of the models.

We tend to have 50/50 on the John Cooper Works and the Cooper S versions; they’re more high-performance versions.

RB: Is there a boost in emphasising the British heritage of Mini?

JP: People do like the fact that it’s British. We make no secret of that.

We’re always keen to play up the Britishness of the vehicle. It’s a selling point of the vehicle, no doubt.

RB: There’s an emphasis on speed and sportiness in the new Mini models, is that helping?

JP: Mini’s always been associated with the driving experience, very sporty handling and very direct handling.

People want to have that feel but in a premium package. The thrill of driving; Mini’s all about having that fun driving experience, it appeals to all ages and to all walks of life.

RB: Are there any particular demographics taking up finance?

JP: The beauty of the Mini and the Mini range is, now, that they appeal to everybody. You’ve got people coming in for their first car, they’ve just passed their test: they really aspire to having a Mini.

It’s seen as a good car to have as your first car, it’s got the right image. Parents like to have their children driving them because they’re very safe and reliable cars.

Then you’ve got people who have maybe had a Mini hatch for a few years, they need something bigger and they can move in to something like the Countryman, which offers them a bit more flexibility, a bit more space inside.

We’re seeing people downsizing, who have had a more traditional saloon car and are now saying ‘I don’t need that sort of car anymore, I’m quite happy to have something a bit smaller, a bit sporty, performance-orientated’.

So when we look at it, there’s not one key segment that’s driven by all these sorts of people. It’s across the board and across the range. The more models we release, the broader the appeal of the car is.

RB: Recent polls seem to show a lack of understanding of consumer finance. Has Mini seen a problem?

JP: I think people are understanding more now about how dealer finance works and I think it’s becoming much more of a default option.

You can see by our penetration rates that people are now realising it’s a good way to own a car.

That’s an attitudinal change and I think we’ll see more of that.

We’ll see more and more people wanting to have ownership of the car down that route and personal contract hire.

RB: Personal contract hire is growing?

JP:We’ve seen more of a demand for personal contract hire. And certainly people more and more understand that concept.

At the moment we’ve got a couple of campaigns which are personal contract hire led. We see that being something people are more interested in.

We’re just talking Mini at the moment. BMW will also have a certain amount. BMW has a big corporate market. Mini is not quite that big.

What you see is personal contract hire as a product, as a whole, will come across the whole industry.

More and more people want that kind of ownership proposition.

richard.brown@vrlfinancialnews.com