Mini plans to bring the next-generation two-door Hatch Electric to the US, but there’s a big problem: the vehicle will be made in China and will therefore have a 27.5% import tariff applied to it.
To get around this issue, Mini expects its US dealers to help shoulder some of that import duty. According to a report from Automotive News citing a dealer briefed on the matter, the BMW Group-owned automaker is asking retailers to accept a 3% cut in their profit margin.
The cut would come out of the 6% “trade margin” dealers get as the difference between a vehicle’s invoice and its sticker price. Mini told dealers that it would lose money bringing the car to the US if they did not accept this margin reduction. According to Mini of the Americas vice president Michael Peyton, the tariff issue is a “big deal.”
"I've told the dealers we need to figure out how to make it happen. It’s a shared pain that we both have to endure to get through this."
Michael Peyton, Mini of the Americas vice president
Unsurprisingly, some retailers are opposed to the plan, with one dealer saying that Mini is “posturing to erode margins” and “the dealer body will fight it tooth and nail.”
Gallery: World Debut: Mini Electric Concept Live At Frankfurt Motor Show
Expected to launch globally in early 2024, the next-generation Mini Hardtop EV will be built in China on a new dedicated platform with BMW Group’s joint venture partner, Great Wall Motor. Why not in South Carolina, where BMW already operates a crossover assembly plant?
Well, Peyton says that can’t happen in the foreseeable future due to the absence of a supplier base.
"Even if you were to say, 'I'm going to ship all the parts in and build in [South Carolina],' it's the same difference because I get a tariff on all those imported parts.”
Besides the small EV, BMW and GWM's Spotlight Automotive joint venture will also build an electric crossover smaller than the Countryman at the same plant in Zhangjiagang, China. As for the Countryman, a battery-powered variant is in the making as well, but it will be produced in Leipzig, Germany.
Note: 2017 Mini Electric Concept pictured