The Smart car is certainly making a smart move:
Hitting the U.S. market just as gasoline prices pass the
The Smart Fortwo micro car is one of the stars of the Los Angeles
Auto Show, where it's trying to drum up buyers before it goes on
sale in January.
Europeans have been driving Smart cars for a decade and the
vehicle has been sold in Canada since 2004, but the Smart is just
now hitting U.S. roadways. Smart USA President Dave Schembri, who
worked on a team that considered a Smart sport utility vehicle for
the U.S. market in the late 1990s, said the country just wasn't
ready for Smart at the time. But fuel prices and increasing concern
about the environment have changed that, he said.
``We need to get smaller in society in terms of our
consumption,'' Schembri said.
Subcompact cars made up 2.4 per cent of the U.S. market in the
first 10 months of this year, compared to 1.7 per cent a year ago,
according to the Power Information Network, a division of J.D. Power
and Associates. Total U.S. vehicle sales were down three per cent
this year, indicating that small cars are gaining fans.
Smart is now contacting the 30,000 people who have plunked down
$99 to reserve the two-seater, Schembri said. He said that group
includes college students and Baby Boomers, RV owners and
multi-millionaires. People from all 50 states have reserved Smart
cars, he said, defying conventional wisdom that the car is only for
urban dwellers. California, Arizona, Texas, Florida, and New York
are among the top states for reservations.
``It's a car that has all the rational reasons to buy it, it has
all the social responsibility reasons to buy it, and in addition,
you get an emotional kick with this car,'' he said. ``When you go up
to any traffic light or stop at any store, you get reaffirmed that
you made a great purchase. People are giving you a thumbs up or a
smile or taking your picture. What other kind of product can you buy
and get that immediate admiration?''
Smart is a division of Daimler AG's Mercedes-Benz brand. It will
be made in France and sold through 73 U.S. dealers, including
Mercedes dealers and dealerships that are part of the Penske
Automotive Group. Roger Penske, a racing icon and chairman of Penske
Corp., also is chairman of Smart USA.
The Smart's base price is US$11,590. A fully loaded Smart Fortwo
Passion convertible goes for $16,950. The car gets about 40 miles
per U.S. gallon.
Some industry analysts are skeptical about Smart's chances in the
United States, where trucks, sport utility vehicles and crossovers
still command more than half the market and gas prices, while
rising, still don't approach Europe's.
Schembri won't say how many vehicles Smart hopes to sell in 2008,
but Aaron Bragman, an analyst with Global Insight, said he doesn't
expect it will more than 20,000, and sales will probably fall off
after that. By comparison, the Toyota Yaris _ the most popular
subcompact on the market _ sold 73,874 units in the first 10 months
of this year, according to Autodata Corp.
``I think it will be a novelty,'' Bragman said. ``It's a very
niche market, and I'm not very sure it has much staying power.''
Bragman said for the price, buyers could get a used car with a
lot more space and practicality. Unless gas prices hit $5 to $6 a
gallon, he said, it's hard to picture Smart gaining much ground.
Even in Europe, Smart has never been profitable. Daimler
announced a restructuring of the division last year, when sales fell
to 102,700 vehicles worldwide from 124,300 in 2005.
But Schembri said Smart is determined to be a player in the
United States. He said the brand isn't doing any advertising so it
can plow its revenues into product development, and he envisions a
hybrid Smart in the next three years along with special editions
like a sporty Smart. Smart also is testing a fleet of 100 electric
vehicles in London, he said.
Another issue for some consumers will be safety. Smart has a
steel safety cage and four airbags, including two in front and two
on the sides to protect the head and abdomen. It also has standard
electronic stability control, which is designed to stop vehicles
from swerving off the road. But the small size is off-putting to
some drivers, particularly if they're driving in the shadow of a
Schembri said the Smart Fortwo is designed to get four out of
five stars on U.S. crash tests and recently got four stars on an
equivalent European test. The U.S. government will test the Smart
car after it arrives on the market.