Smart Car Sales in U.S. Will Easily Exceed Forecast

By Brendan Moore

12.07.2007


When Penske Automotive Group announced earlier this year that they would be the distributor for Daimler’s Smart car in the United States, their sales goal in the first year was modest at 16,000 units for 2008 calendar year. There were many people that thought that forecast was laughably optimistic. I predicted (in print, mind you) that Smart would easily make their sales numbers the first two years in the U.S., and then find the going a bit tougher.

Smart has taken 30,000 refundable $99 deposits for the car so far. The doubters said, “Well, so what, they’re refundable; let’s just see what the take rate is”. Now we have the news a few days ago that Dieter Zetsche, CEO of Daimler AG, has told reporters that 9 out of 10 deposit-holders have subsequently placed full orders for the Smart. That puts Daimler, Smart and Penske well past their sales forecast as well as their extra production capacity. Dave Schembri, president of USA Smart, says that some cars ordered now will not be delivered until 2009.

Among the many problems an auto manufacturer can have, demand exceeding supply is one of the best, but it’s still a problem. Daimler would like to sell as many Smarts in 2008 as there are people that want one of the cars, but that is not going to happen. We contacted Smart last month to ask them what Plan B was if demand exceeded supply the first year of production as has happened, and they did not respond to us, but one has to assume to assume that production will be increased to some number that won’t be too high (unsold inventory) or too low (unhappy would-be buyers). But what is that all-important second-year sales forecast?

The Smart minicar is built by the Mercedes Car Group. Smart has never been profitable despite selling over 800,000 Smart ForTwos in 36 countries since 1998 and Mercedes is counting on the addition of U.S. sales to finally push the Smart unit into profitability.

Official retail pricing for the Smart ForTwo was released by Penske Automotive Group’s Smart USA in September, but for your information, we will reprint it here.

The lowest priced model, the Pure coupe, will sell for a base price of $11,590, and the higher-priced Passion coupe model will sell for a base price of $13,590. The Passion is also available in a convertible version that starts at $16,590. None of the prices quoted include shipping.

Every Smart model has a three-cylinder, 1.0 liter engine that puts out 71 horsepower, and every model has four airbags and ABS. The Passion trim level adds as standard: alloy wheels, air-conditioning with climate control, panoramic sunroof, a nice three-spoke leather sport steering wheel, paddle shifter and a CD/MP3 player. Tick the “comfort” option box and you get leather seats, electric power steering, rain/light sensors and auto-off headlights with exit delay. The Passion Cabrio has an even higher level of standard equipment.

These are MSRP prices; actual purchase prices may be higher now that supply is less than demand.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

Share This Post On

5 Comments

  1. The dealer here in NYC is already adding “market adjustment” pricing to the MSRP of the Smart fortwo. I don’t know if that’s OK with Smart, but it turned me off.

  2. My dealer here in Miami area is at MSRP and says I should get mine end of Feb., beginning of March. Fingers crossed, and waiting for my Smart.

  3. You should keep your fingers crossed that you don’t get hit by a normal-sized vehicle, or worse, a full size SUV. This thing will be squished like a little bug.

  4. The Smart is very safe car, safer than a lot of bigger cars. That doesn’t mean the laws of physics are ever repealed, if a full-size SUV hits one it would be trouble, but it’s trouble if one of those damn things hits a regualr car too. They should be outlawed for anyone that doesn’t actually need one.

  5. Sales will drop like a rock the second year, just you wait. As soon as people actually have some behind the wheel of these things, they won’t want to keep it too much longer.

Submit a Comment

Your email address will not be published.