When Volkswagen decided to discontinue its “new” Beetle, it did not have to deal with logistical issues such as remodeling showrooms like Toyota had to do when the Scion brand was phased out. That’s because the Beetle has been but one nameplate among a handful scattered around VW showrooms.
Over the last two decades, a number of automakers have experimented with what might be called boutique brands. Here I’m talking about vehicles with distinct branding — often including their own showrooms — but offering a narrow range of fairly low-volume vehicles. Currently Fiat, Mini and Smart could be placed in that category.
The graph below hints at how the long-term survival of each one of these brands is in at least some doubt. All three brands have recently been selling under 50,000 units per year.
Smart
When this brand of city cars was introduced in 2008, sales almost hit 25,000 units. Since then it has been mostly downhill, with 2018 being the worst year yet — less than 1,300 Smarts were sold in the United States. Parent company Daimler-Benz is attempting to revive the brand by switching to electric power.
Fiat
This Italian brand was reintroduced in the U.S. in 2011 with the hope that it could carve out a niche similar to that of BMW’s Mini. Sales peaked at almost 47,000 units in 2014 and have been falling since then. In 2018 sales dropped to under 16,000 despite an expanded lineup that includes the 124 Spider, 500X crossover, 500L five-door hatchback and the original three-door coupe. The latter is Fiat’s highest-volume model but only sold 5,370 units in 2018.
Mini
BMW’s Mini brand was launched in the U.S. in 2002 and has seen the most stable sales of the boutique brands listed here. Since 2008 the Mini has hovered in the 50,000 to 66,000 unit range. However, in 2018 sales fell to under 44,000 units despite an expanded line that includes a larger Countryman crossover.
Scion
This brand was discontinued because its sales had fallen from a peak of roughly 173,000 in 2006 to only 56,000 in 2015. One theory for the dramatic decline is that car buyers tended to view Scion as a “lesser Toyota,” Kelly Blue Book analyst Karl Bauer told Automotive News (Undercoffler, 2016).
Perhaps these other boutique brands are experiencing somewhat similar limitations. For example, Automotive News commentator Autoreport24 (2018) suggested that a Fiat 500X would be popular if it was sold under a Chrysler or Dodge brand. This subcompact CUV peaked at less than 13,000 units in 2016 but fell to only 5,223 in 2018.
One of the most significant commonalities between the boutique brands has been that none succeeded for very long in generating significant volume from one nameplate. Two out of three of the parent companies responded by diversifying the product range.
Thus far this strategy has failed at Fiat. Diversification has worked the best with Mini, where the addition of a larger CUV and four-door model has helped to stabilize sales. However, one might reasonably question whether it is cost-effective for Mini to offer such a broad line given the brand’s low sales.
NOTES:
Sales figures are from carsalesbase.com (2019), Automotive News (Undercoffler, 2016) and Automotive News Sales Report e-newsletter.
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Automotive News; 2018. Automotive News Sales Report (subscription required). Emailed December 3.
- Autoreport24; 2018. Commentator in “FCA sales jump 17 percent on Ram, Jeep demand; fleet volume grows.” Automotive News (subscription required). Posted December 3; Accessed January 28.
- Carsalesbase.com; 2019. “U.S. Car Sales Data.” Accessed January 28.
- Undercoffler, David; 2016. “Toyota to scrap Scion brand, keep the cars.” Automotive News (subscription required). Posted February 3; accessed Accessed January 28.
Here’s a “What-If”: What if Toyota had put all of their EVs under the Scion banner like the Mitsubishi Leaf ? I guess they wanted to hedge their bets, and did not want to brand their models with other names. I do not know how well the Scion brand actually brought younger car buyers into Toyota showrooms.
In terms of Fiats, their reputation for poor reliability have made their reintroduction less than stellar. The appellation, “Fix It Again, Tony” is applicable here, I think.
As far as Mini goes, it gives BMW a popular price car to offer in their showrooms, something that should be redundant at Toyota. The Smart problem is simply that it was too small. My first thought was that in any accident it would end up being a hood ornament. However, take a look at the other end of the boutique range. The luxury brands of the Asian makes seem to have settled in as established brands and are doing just fine.