Is the smart Too Smart for the US?

By Chris Haak

06.25.2007

The smart [the all-lowercase name is almost as irritating as Saturn’s all-uppercase names, and will not be repeated throughout the rest of this post], a diminutive “city car” produced by Daimler, is going to make its official US sales debut in the first quarter of 2008, to be sold by United Auto Group, a large dealership chain owned by Roger Penske. There has been a lot of hype surrounding the US availability of this car; the official website at http://www.smartusa.com/ even is so kind as to provide a way for interested owners to “reserve” a 2008 Smart for just $99.

Although the reservation fee is refundable at any time, and the company claims that the fee and reservation system are there to “gauge interest” in the car, it sounds to me that it’s arrogant at best, and a scam at worst. How does committing $99 – in what is not even really a commitment, because you can get your money back, and they don’t have to sell you a car if they don’t have enough – really gauging interest? Plus, the “deposit” is less than 1% of the $12,000 base price of a Smart. So basically, Smart expects buyers to pay $99 for the privilege of being contacted if a Smart car is available for purchase.

As of early June, UAG announced that they had over 20,000 Smart “Insiders” who paid $99 to be on the sort of wait list…so Smart is now holding almost $2 million for basically doing nothing. I’d like someone to give me $2 million for a little while. I won’t even touch the principal, and if I invested it in a mutual fund that earned 10% per year, I’d be making six figures without lifting a finger. Sweet.

Smart expects to produce about 16,000 ForTwos for sale in the US for the 2008 model year, and I can see them meeting or even exceeding that goal, but is this really a car that’s going to succeed beyond core urban centers like New York, San Francisco, Chicago, or Miami? Everything I’ve read about them has said that they’re surprisingly roomy inside for two passengers, but lack luggage space, and give off a vibe of feeling a little too close to the road and surrounding traffic, without much sheet metal between you and them.

For a quick run to the grocery store, or for simple urban parking, they seem like a neat idea, if perhaps just a novelty. They’ll get pretty good gas mileage (over 40 miles per gallon, even without the benefit of hybrids or diesels) and crash tests have been successful in them because of their innovative engineering. But how many Americans, who pretty consistently are in love with 1) large vehicles, and 2) fuel economy, as long as it requires no sacrifices in vehicle size, comfort, or engine power will be willing to pay $12,000 for an 8.8 foot long, 1600-pound “city car,” when most Americans live in large suburbs and do not have to worry about urban parking or maneuverability? I think the Smart requires too many sacrifices – namely, interior space, engine power, and perceived occupant protection – to be a huge success in the US.

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Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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4 Comments

  1. I think you are discounting two things. One, the visual appeal, because there are people (not me, but other people) that like the way the car looks. Two, a really small car in a densely populated urban area is very easy to park, compared to other cars. Unless you’ve lived in NYC, Boston, D.C., Chicago, S.F., Miami, Philadelphia, etc., you have no idea just much time and energy is consumed by looking for a place to park. The small size that puts off many buyers will in fact attract many as well.

  2. 20,000 deposits is nothing to sneeze at, even if they’re refundable. And the car doesn’t even go on sale until January 2008, so how many more deposits will they get between now and then? I think they only planned on selling 12,000 cars in 2008 to start with, so I can’t see why you’re so down on Smart selling enough cars. Sure, people in Idaho or West Virginia won’t be buying them, but thet’ll sell enough in the big cities, and if the car is a good car, they’ll some more the next year.

  3. I had thought about picking up a smart while I was living in Germany. After coming back to the states, I feel like my Jetta is too small to be on the Texas roads with the monster pickups.

  4. I’m not saying they won’t meet their sales goals – but I think the cars will have limited appeal. Smart has been a money losing proposition for DaimlerChrysler since its inception (somewhere over $4 billion in cumulative losses). So either the business plan was flawed, or fewer people want these cars than they projected. And in Europe, DCX only sold about 132,000 Smarts in 2005 and about 103,000 in 2006, where the environment is much more friendly for them. I can easily see them meeting their modest sales goals for 2008, but 12,000 units for nearly any other new car would be considered a failure. That’s BARELY making a dent in the market.

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