Small Smart Fortwo Aims for Big Sales

by : Anthony Fontanelle



Size doesn't matter, says the Smart Fortwo micro car. Measuring 8-feet, 8-inches, the bite-size vehicle will cruise the American roads in January amidst the soaring gasoline prices. The small two-seater's price ranges from $11,590 for the base model to $16,590 for the jam-packed Fortwo convertible. For gas-prices conscious drivers, there is nothing to worry about. Weighing 1,800 pounds, the Smart car brags 40 miles per gallon.

To be available in 36 countries, the Smart car already sold more than 770,000 units and in the USA, Smart is expecting for a blockbuster. Smart cars to be sold in the U.S will be built in France and to be distributed in 73 dealers all-over the country. Dealership will involve Mercedes dealers and all showrooms belonging to the Penske Automotive Group owned by world renowned racer, Roger Penske. Penske had been appointed as chairman of Smart USA, a division of Daimler AG's Mercedes-Benz brand.

According to Smart USA spokeswoman Jessica Gemmara, there had already been 30,000 consumers who deposited $99 for a Smart car reservation. Although the deposits do not mean actual sales, the brand expects that they will be able to sell at least 30,000 units during the small car's first year in the U.S. market.

"There will obviously be some fallout from the reservation program because of life changes, or because people move - things like that, but our goal is to fulfill all those orders," she said at the Los Angeles auto show, where Smart has a large exhibit aimed at drumming up more business.

According to data from J.D. Power and Associates, although the small car market represents a small fraction of the total American auto market, the segment is on growth. For the first ten months of 2007, the subcompact cars (smaller cars than the compacts) accounted for the 2.4 percent of the U.S. market compared to last year's 1.7 percent. Famous subcompacts are made by Ford, Chevrolet and Honda (also makes ). For this year, the Chevy Aveo, Honda Fit and the Toyota Yaris sold 73,874 units in their hatchback and liftback models.

For analysts, the Smart Fortwo is unlikely to follow such sales, in Europe; the minute vehicle was not profitable. Last year, the sales of the division fell to 102,700 from 124,300 in 2005 forcing Daimler AG to subject the brand under a restructuring program.

Safety is another issue why analysts doubt the Smart's success in the U.S. auto market. The diminutive vehicles measures 45 inches shorter than the Yaris and 40 inches shorter than BMW's Cooper. Weighing 500 pounds less than any other subcompact, the passengers are in great danger at collision accidents.

However, Smart USA is still optimistic about their car. According to Jessica Gemmara, demands for the Fortwo can come from different sources.

"We've seen strong interest in places that surprised us, like Birmingham, Ala., or Tulsa, Okla.," she said. "These are places in the heartland of America where people tend to own a truck and don't want to drive a rinky-dink car, but we've seen some of the biggest turnouts in these places, and once these people get to touch and experience the car they're just as interested as (big) city dwellers."