Smart is finally coming to the US
In less than a year, the 2008 Smart ForTwo will go on sale at selected US dealers. The ForTwo city car will come in three configurations: The base version (<$15,000) called the Pure, a well-equipped model called the Passion and an "upmarket" convertible called the Passion Cabriolet. If you use the European model as a gauge, a fully-equipped ForTwo could easily top $25k.
This second-generation ForTwo is supposed to be "dramatically improved" over the first-generation model. The first ForTwo "was not fun to drive" according to an AutoNation, Inc. executive. Mr. Penske, Smart USA and the rest of the potential dealers are onboard with the new slogan that the new Smart ForTwo is "fun to drive" and it will "put a smile on your face."
Smart says that the new car will get over 40 mpg (combined highway/city mileage) and have a top speed of 90 mph. On introduction, there will be just one three-cylinder gasoline-powered engine. Mercedes hints that we may get a diesel version in 2009 equipped with the corporate Bluetech emissions scrubbing system.
Things are moving fast. Mr. Penske and Smart say that Smart will begin retail sales in
January 2008. There will be 50 to 60 dealerships that will be primarily in the "smile" states on the East and West coasts and in the Sun Belt targeting major urban markets such as Los Angeles, New York, Chicago and Washington D.C.
Mercedes-Benz dealerships will be given first choice for the dealerships followed by other DCX brands (Chrysler/Dodge/Jeep). Smart won't be placed with any non-DCX brands. There is no shortage of interest in a Smart franchise. Mr. Penske/United Auto has received more than 1,200 applicants. Of the applicants, United Auto has invited approximately 400 dealer-applicants plus all U.S. Mercedes-Benz dealers to attend presentations starting this month is Las Vegas, Atlanta, Detroit and New York. (Why Detroit??)
Dealer selection should be complete by May or June and you should start to see the selected dealers begin building shortly thereafter. Later in 2007, probably in the fourth quarter, Smart dealers will begin taking orders for the ForTwo. Prices won't be set until December 2007 (just before introduction) but dealers will probably start taking orders before pricing is announced.
Dealer investment is expected to be around $300,000 apiece. A Smart store would have to be at least 2,000 square feet and have its own entrance. I can only hope that Beverly Hills Mercedes-Benz has the foresight to get a Smart franchise. I'm convinced that the Smart ForTwo will be a major fashion accessory for rich kids. Beverly Hills BMW made a big mistake by not getting a MINI franchise when they were being planned. There are only two MINI dealers in the metro LA area -- Universal City and way downtown at Nick Alexander MINI. It would be nice to have a MINI dealer in Beverly Hills.
Mr. Penske sees a very rosy picture for Smart in the U.S. He believes that a Smart dealer will be able to be profitable in the first year or two. He expects each store to be able to sell more than 200 vehicles in the first year alone. So let's do the math. If there are 50 to 60 dealerships and each sells 200 vehicles in the first year, then Smart believes it will have sales of 10,000 to 12,000 vehicles in 2008. Those numbers would put retail sales at around $200 million the first year in the U.S. I think those numbers may be conservative. Concern for the environment combined with great fuel economy, the "fun" factor, and the LA/NYC "fashion" factor may all lead to higher sales. I hope Smart has the production capacity online to fill orders quickly.
The all-new Smart ForTwo is much porkier than the first generation. Its length has grown almost 12 inches. The new car is 8.8 feet long, 5.1 feet tall and 5.1 feet wide. That should make it small enough to fit two ForTwos in one metered parking space in the US. This isn't good news for Smart buyers in congested European cities like Paris and London where every centimeter counts; but it gives the new ForTwo a bit more visibility in the US market which is dominated by giant pickup trucks and SUVs.
To get the U.S. market acquainted with the Smart brand, Mr. Penske and Smart USA are taking the show on the road. And they are going to do it in a big way. Starting in mid-May, three 38-foor tractor-trailers will tour the US. Each truck will carry four Smart cars. Smart says this is a new type of car for the US. That's stating the obvious, huh? Another stupid statements is that the ForTwo is a car "that you will need to feel, see, touch and drive" in order to understand and appreciate it. I think that you should feel, see, touch and drive any car before you buy it.
Of course, it doesn't always work that way. In the early days of MINI, you couldn't get a dealer to let you drive one as they were all sold by the time they arrived at the dealer. MINI just expected you to order one the way you liked it or buy the one on the lot. After you bought it, you got to "test drive" it on the way home. The same happened for the Pontiac Solstice and Saturn Sky. You either bought it and drove it home (your test drive) or you didn't touch the car. No test drive was offered. I hope that same attitude doesn't affect the early sales of the Smart ForTwo.
In all, the trailers will go to 44 cities and make 55 stops. Of course, LA, SF and NYC are prime targets; but they are taking the show to other congested cities like Chicago, Detroit, Seattle, Phoenix and Minneapolis. If you ask me, Detroit, Chicago and Minneapolis are way outside the Sun Belt or "smile" states. And if Smart is a hit in Detroit - one of the last holdouts for American brands - then you know how serious the problems are in the domestic car business.
I've been to Smart showrooms in Paris and there are lots of color choices and option packages that can really raise the price of the car. It will be interesting to see the standard level of options on the base Pulse and the more likely choice for most people in LA, the Passion. The tridion safety cage comes in black or silver. The body panels come in several colors so the number of colors combinations is effectively doubled by the choice of black or silver safety cages.
So watch for the Smart tractor-trailer show in L.A. this summer. Sign up for updates on the Smart USA website. In the next few months, you will be able to start picking colors and option packages then come next fall, get your checkbooks out!
