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| Re: Detroit News - Will America wise up to the Smart? -
12-05-2007, 02:02 AM
BRAINS OVER BRAWN: Daimler's Smart car set to go on sale next month 1,800-pound two-seat vehicle gives consumers an alternative to gas-chugging SUVs. WASHINGTON -- Daimler AG's Smart car will go on sale in the United States next month with orders for more of the gas-sipping minicars than Daimler can build next year.
Daimler Chairman and CEO Dieter Zetsche said Tuesday that more than 30,000 Americans have paid a $99 deposit to buy one of the 1,800-pound two-seat vehicles that get 40 miles per gallon on the highway. The automaker expects to convert 90 percent of those deposits to sales.
"We were totally amazed by the kind of reaction we got," Zetsche said at a breakfast with reporters. "We will not be able to meet the demands here next year."
Smart, a unit of Daimler's Mercedes-Benz Cars division, is targeting the three-cylinder, 70-horsepower vehicle at consumers weary of rising gasoline prices, as well as environmentally minded motorists and urban dwellers. The car's top speed is 90 mph, and it is electronically limited by an on-board computer.
Smart USA will be headquartered in Bloomfield Hills and attached to the only Michigan Smart dealership on Telegraph Road, north of Square Lake. The flagship dealership and eight others will be owned by Roger Penske's Penske Automotive Group, Smart's sole U.S. distributor.
Smart USA President David Schembri said the company has seen strong interest in Michigan. More than 1,000 Michiganians have paid deposits, making the state one of the top 10 for Smart.
Smart will have 74 dealerships nationwide by the end of the year, including 33 attached to existing Mercedes-Benz dealerships.
Schembri said the reason for driving a small car alone around town is simple. "If I go out to dinner by myself, I don't order enough food for five people," he said.
A person ordering a vehicle now might be able to get one in late 2008 or 2009, but customers should check with dealerships to see if there are cancellations, Schembri said.
The Smart fortwo starts at $11,590 for a very basic model -- one without a radio, power steering or air conditioning. The top-of-the-line convertible model with options is $17,440.
David Healy, an auto analyst at Burnham Securities predicted there will be some initial demand for the Smart, but questioned how much sales would grow in the next few years, as other small cars enter the market -- including a potential Chinese-made small car.
"It's not going to be a financial disaster, but the exchange rate is an issue," Healy said.
Zetsche acknowledged that the expensive euro makes it harder to make a profit on the Smart, which is built in France, but he said the company would make money on the car in the States.
Since the Smart brand debuted in Europe in 1998, the company has sold about 850,000 vehicles. In Canada, the company sold more than 10,000 in the first 2 1/2 years; it expected to sell only 3,000.
Zetsche joked that at just 8-feet-10 inches, the Smart is only a foot longer than NBA basketball star Yao Ming is tall.
"When you just want to go from to A to B with a lot of fun and don't want to carry three persons, Smart gives you everything you can ask for," Zetsche said.
Zetsche said the only car he personally owns in Europe is a Smart that he uses to go shopping and downtown.
Daimler also announced Tuesday it is seeking to work with an American city to locate 100 plug-in electric Smart vehicles, similar to a test it is doing in London and is considering in France. British officials have waived the $17 congestion surcharge for drivers of the plug-in vehicles and have given them parking and access to recharging stations.
Adrian Lund, president of the Insurance Institute for Highway Safety, who test drove the Smart car Tuesday, said his group was looking forward to putting the car through its crash tests. Daimler expects the car to receive four star-crash ratings.
Several members of Congress and regulators also drove the car Tuesday.
Daimler's Smart timing
Daimler is preparing for the first Smart sales here as a bill is moving through Congress that would hike fuel economy mandates to an industry average of 35 mpg. Zetsche said that Daimler supports the legislation.
He said Mercedes-Benz is working to cut the weight of all its models by 5 percent and will eventually produce hybrid versions of all models. "We are part of the problem," Zetsche said, noting that passenger cars account globally for 12 percent of man-made greenhouse gas emissions BRAINS OVER BRAWN: Daimler's Smart car set to go on sale next month
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