Automotive News Europe January 8, 2009 06:01 CET
As far as sales go, there weren't many success stories in 2008. Subaru eked out a small year-over-year gain. And Daimler's Smart unit racked up sales of 24,622 in its first year in the United States.
Smart is turning into an improbable success here. Americans have never before bought into the idea of microcars. All the tiny cars that came here in years past -- the Subaru 360, the BMW Isetta, the Crosley and others -- failed. Even the original Mini Cooper never sold well in the United States and was pulled in 1967.
With Smart now heading into its second year, President David Schembri said Smart USA aims to maintain its momentum, add a few dealers, keep volume about the same and improve customer satisfaction. He recently spoke with Automotive News reporter Richard Truett.
Have Smart customers complained about the crudeness of the ForTwo's automated manual transmission?
You might call it crude; most people call it fun. That's one of defining differences of this vehicle that makes it the unique car that it is. It takes some getting used to, but what we've found is that once our owners get used to it, they love it. They would not trade it for a standard automatic transmission. About 95 percent of the cars are being bought with paddle shifters, so you are able to transition between driving in straight automatic mode or paddle shifters. That's a heck of a lot of fun, and it adds a different dimension to driving.
How soon before Smart gets some competition?
Well, there is a clear expectation that based on the acceptance of the microcar concept in the United States, there will be competitors that come into the market. And we welcome that. That means there is a viable segment there. We think our car is different enough to set itself apart from any competitors.
What has Smart USA learned about how consumers are using the ForTwo?
For the most part, it is a second or third vehicle. What we anticipated is exactly what we are finding. This car appeals to four distinct groups of people. First-time buyers use it as their primary vehicle. They'll buy it mainly because of its value. Urban dwellers will use it as their primary vehicle because of its maneuverability. Baby boomers, one of our largest segments of buyers, will have it as second or third car and use it as their commuter car. And then empty-nesters will have it as a second or third car. They are also using it to commute.
What volume are you expecting in 2009? Will it drop now that early demand has been filled?
The most optimistic forecast for 2009 indicates that the entire market could be off by about 25 percent over 2008. For us to be able to duplicate what we did in 2008 would be a huge success. We'd be very happy at 25,000.
Will Smart USA be profitable at that level?
Our business plan is very solid, and we are optimistic at those kinds of volumes that our business plan works for both us and our dealer organization.
From our vantage point, Smart's U.S. launch seemed to go very smoothly -- no recalls or other glitches.
It's one of those moments in your career that you hope for, that you have an opportunity to launch a car in the manner that we did. But that's not to say that we aren't trying to get better. Every day we are trying to improve every aspect of our business.
What do dealers want from Smart USA? Are they asking for different body styles or a diesel engine?
I think the dealers would like us to sustain the momentum we have created. If we can do that, they'll be very happy. The diesel engine for the U.S. market would be too expensive to homologate.
What will we see on the Smart stand at the Detroit auto show next week?
We will be presenting the Brabus model, which is an appearance package with side skirts, front and rear aprons, dual chrome-tipped exhaust, different wheels and suspension. In addition to that, you'll see an electric-drive Smart that is part of our future.
What are Smart's marketing plans for 2009?
This brand was founded on below-the-line marketing, doing things in nontraditional ways. And we'll continue to look at ways to do things in that same spirit.
As far as sales go, there weren't many success stories in 2008. Subaru eked out a small year-over-year gain. And Daimler's Smart unit racked up sales of 24,622 in its first year in the United States.
Smart is turning into an improbable success here. Americans have never before bought into the idea of microcars. All the tiny cars that came here in years past -- the Subaru 360, the BMW Isetta, the Crosley and others -- failed. Even the original Mini Cooper never sold well in the United States and was pulled in 1967.
With Smart now heading into its second year, President David Schembri said Smart USA aims to maintain its momentum, add a few dealers, keep volume about the same and improve customer satisfaction. He recently spoke with Automotive News reporter Richard Truett.
Have Smart customers complained about the crudeness of the ForTwo's automated manual transmission?
You might call it crude; most people call it fun. That's one of defining differences of this vehicle that makes it the unique car that it is. It takes some getting used to, but what we've found is that once our owners get used to it, they love it. They would not trade it for a standard automatic transmission. About 95 percent of the cars are being bought with paddle shifters, so you are able to transition between driving in straight automatic mode or paddle shifters. That's a heck of a lot of fun, and it adds a different dimension to driving.
How soon before Smart gets some competition?
Well, there is a clear expectation that based on the acceptance of the microcar concept in the United States, there will be competitors that come into the market. And we welcome that. That means there is a viable segment there. We think our car is different enough to set itself apart from any competitors.
What has Smart USA learned about how consumers are using the ForTwo?
For the most part, it is a second or third vehicle. What we anticipated is exactly what we are finding. This car appeals to four distinct groups of people. First-time buyers use it as their primary vehicle. They'll buy it mainly because of its value. Urban dwellers will use it as their primary vehicle because of its maneuverability. Baby boomers, one of our largest segments of buyers, will have it as second or third car and use it as their commuter car. And then empty-nesters will have it as a second or third car. They are also using it to commute.
What volume are you expecting in 2009? Will it drop now that early demand has been filled?
The most optimistic forecast for 2009 indicates that the entire market could be off by about 25 percent over 2008. For us to be able to duplicate what we did in 2008 would be a huge success. We'd be very happy at 25,000.
Will Smart USA be profitable at that level?
Our business plan is very solid, and we are optimistic at those kinds of volumes that our business plan works for both us and our dealer organization.
From our vantage point, Smart's U.S. launch seemed to go very smoothly -- no recalls or other glitches.
It's one of those moments in your career that you hope for, that you have an opportunity to launch a car in the manner that we did. But that's not to say that we aren't trying to get better. Every day we are trying to improve every aspect of our business.
What do dealers want from Smart USA? Are they asking for different body styles or a diesel engine?
I think the dealers would like us to sustain the momentum we have created. If we can do that, they'll be very happy. The diesel engine for the U.S. market would be too expensive to homologate.
What will we see on the Smart stand at the Detroit auto show next week?
We will be presenting the Brabus model, which is an appearance package with side skirts, front and rear aprons, dual chrome-tipped exhaust, different wheels and suspension. In addition to that, you'll see an electric-drive Smart that is part of our future.
What are Smart's marketing plans for 2009?
This brand was founded on below-the-line marketing, doing things in nontraditional ways. And we'll continue to look at ways to do things in that same spirit.
Will Smart USA be adding dealers in 2009?
There may be two or three dealers added in markets that we are not in.
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