Smart Struggling With Sales Slump as it Prepares to Introduce EV Version
By John O'Dell June 7, 2010
By John O'Dell, Senior Editor
We've always thought the Smart does a great job as small city car, offering utility, safety, a bit of style, easy parking and moderately decent fuel economy at a price that doesn't bust the budget.
Okay, we hate the Smart's herky-jerky automatic transmission and wish the company would smooth it out and offer a manual version in the U.S. as it does in Europe, but overall, we like it.
So it's disappointing, to say the least, to have to report that as Smart gets ready to launch its long-awaiting Smart Fortwo EV, sales of the conventional gasoline model are tanking.
Dealers moved a monthly average of 1,916 of the tiny two-seaters for the first 18 months of sales - March 2008 through August of '09.
Then the Smart hit a wall.
Customer Shortage
The monthly sales average since August 2009 has dropped by more than 66 percent to just 633 a month, ranging from a high of 864 in December to a low of 278 in January.
Edmunds.com senior analyst Jessica Caldwell ran through our amazing data banks and came up with some interesting stuff, leading her to believe that, quite simply, Smart may have run out of customers for its two-model (coupe and convertible) U.S. lineup.
To that end, adding an EV might help. Maybe.
With a base MSRP of $11,900 and an average transaction price - after options - of about $15,600, the gasoline Smart "is almost as costly as four- and five-seat subcompacts, is it is just not seen as a great value," Caldwell said, adding that it does best when gas prices are high - typically when consumers start looking for small and efficient wheels.
Right now, though, Caldwell found that the Smart is not high on anyone's consideration list (except, of course, for the few who buy one).
People who purchase the Smart are "people who want to be seen as being different," she said. "But there are only so many of those buyers out there."
Consideration Low
In April - the last month for which we have this data - only 0.3 percent of consumers shopping seriously for new cars on Edmunds.com considered a Smart - that's 3 in 1,000.
The highest Smart consideration has ever been among Edmunds users was 4.7 percent in May 2008 - when gas prices stated rising toward that summer's record-setting $4.11 per gallon. And when gas was at $4.11 (national average, in July 2008), Smart consideration already had started falling and was down to 2.7 percent.
It hasn't topped 1 percent in any month since October 2009.
Looking at Edmunds' cross-shopping trends, she found that consumers looking at the Mini are the best potential target for Smart dealers. But even as Mini shoppers look at Smarts more than do shoppers for any other subcompact and compact model, in May it was only 11 percent of them who did so.
Things go south quickly after that.
Incentives Up
Just 7 percent of Edmund shoppers looking at the Toyota Yaris, Nissan cube or VW New Beetle also looked at the Smart, and just 5 percent of Honda Fit shoppers put a Smart on their list as well.
One thing the Smart did have going for it was a pretty stable MSRP versus actual selling price, but that's started breaking down as well.
Except for a very small dip last spring, when average transaction prices were $7 to $10 dollars below MSRP, the two numbers have been identical - until March, when the typically equipped Smart Fortwo carried an average $15,602 MSRP while the average transaction price was $15,377 - falling to $15,300 in April.
At the same time, Edmunds' proprietary True Cost of Incentives data shows that average incentives for the Smart topped $1,000 for the first time ever in March and rose to $2,180 in April. That's a 14 percent discount.
Enter the Smart EV
We're not sure how it will affect things, but perhaps bringing the Smart Fortwo EV into the U.S. will help a bit.
It certainly will give the brand a boost in the media as we all start reviewing it, and I can attest from personal experience - after a short test drive last winter in Europe - that the single-speed electric motor provides a much smoother and more pleasant ride than does the gas model's cranky automatic.
Pricing hasn't been discussed publicly, but we can expect a battery-electric Smart to hit the market several thousands of dollars above the gas model - which could make the gasser a bit more attractive to some.
We don't know whether the Smart EV for the U.S. will change much from the European model we drove, but if it doesn't then expect a 14 kilowatt battery pack (developed by Tesla Motors for Smart's parent, Daimler) good for up to 75 miles of range -maximum, at slow speeds - with an electronically limited top speed of 65 -70 mph.
We'll have more to tell you a bit later in the week because we're on our way today to the wilds of Brooklyn for the first U.S. Smart EV drive program.
Although it wouldn't make a lot of sense in Missoula, Montana, the Smart EV would seem to be a logical extension of the gasoline Smart for urbanites who are serious about cutting their oil habits and carbon footprints and/or desperate for a car they can squeeze through crowded streets and into tight parking spaces.
It will remain to be seen, though, whether the market for a Smart EV - which we suspect will be sold in limited numbers and select regions - proves to be any deeper than for the gasoline Smart.
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LEAVE A COMMENT
Click here to comment on this entry.The Smart was a big seller in Canada right up to the point that we got the American version. Without the 75 mpg diesel engine, people lost interest in the little car.
An electric version will sell but not in the numbers of the diesel.
The ONLY reason to look at a Smart over a Toyota Yaris, is the downtown parking Olympics, where the shortest car wins. The Yaris wins in every other category (price, room, ride, HNV, power, quality, resale). Going EV is the ONLY thing that could change that for Smart, and right on target for it?s city car core markets. It's about time.
We love the Smart, and drove one in Italy for two weeks... fun car.
BUT, marketing mistakes were made in America:
1) Low MPG version brought first... should have brought the high-mileage diesel version first.
2 High price tag: Why pay that much for something that gets about the same MPG and price as a Honda Fit?
3) Why delay bringing an electric version to America? We're tired of Europe getting all the green goodies first...with America to wait for the droppings.
I, for one, got my Smart deposit back, once I realized the high price, low MPG of the American version...and I can just keep on driving my 10 year old car, with low monthly maintenance costs...that's the ultimate "green"...keep driving and re-using daily what you already have paid off.
Overall SMARTusa FAIL.
"Low MPG version brought first"
Oddly enough, low MPG and also low power. They couldn't even push it as fun and sporty.
It rode the "cute" train for a while, but that's finally derailed.
I would also like to point out that it achieves its MPG using PREMIUM not just regular. also the engines carbon emissions are atrotious.
if you want to be green DONt buy a smart you are much better with a PZEV rated engine. I know my brothers focus has one not sure about the yaris or fit but they are both very good alternatives to the smart. also the Fit Yaris (upcoming fiesta) Focus corrola and civic get comparable or better MPG but you can also car pool since they have 4 seats where in the smart thats not really a great idea.
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