Post by Clouseau on Jun 29, 2006 13:15:27 GMT
www.NYTimes.com
Are Americans Finally Ready to Get Smart?
FRANKFURT, June 27 — Are Americans finally ready to get Smart?
DaimlerChrysler, which shelved an earlier plan to bring its Smart mini-car brand to the United States, plans to announce on Wednesday that it will introduce the tiny, two-seat vehicle to the American market early in 2008, according to several executives at the company.
The German-American carmaker is calculating that with stubbornly high gasoline prices, mounting concerns about global warming, and waning interest in sport-utility vehicles, consumers in the United States will welcome a car that is no larger than a good-sized riding mower.
"Now is the right time to go to the U.S.," said a senior executive at DaimlerChrysler, who spoke on condition of anonymity because the plans were not yet public. "The world, and the U.S., has changed in the last two years."
The Smart car has won a hip image in European cities like Rome and Paris, with their serpentine streets and snug parking spaces. It was recently featured in the film "The Da Vinci Code," as well as in the remake of "The Pink Panther," in which it served as the ride of choice for Inspector Jacques Clouseau.
But DaimlerChrysler's management of Smart has been almost as hapless as the fictional French policeman's driving habits. Since the first car rolled off the assembly line in 1998, Smart has lost $3.6 billion, according to analysts. Efforts to expand beyond the two-seat model, known as the Fortwo, have misfired — sometimes undermining Smart's image as a new-age city car in the process.
Among the stranger ideas, now discarded, was to introduce Smart to the United States in the form of a pint-sized sport-utility vehicle. "It's clear that no one is waiting for another S.U.V.," the executive said.
After heavily promoting Smart's arrival at the Detroit auto show in early 2005, DaimlerChrysler decided to hold off on an American rollout. In April 2005, it announced it would eliminate two models — the ill-conceived S.U.V. and a widely derided roadster — and lay off 700 employees.
Dieter Zetsche, the chief executive of DaimlerChrysler, considered selling the Smart line to another company, before settling for yet another overhaul last March that trimmed costs further and eliminated the poorly selling four-seat model, the Forfour. That left only the original Fortwo. That is the car — equipped with extra emission-control and safety features — that will be sold in the United States.
DaimlerChrysler plans to market the Smart to drivers in New York, Los Angeles, San Francisco, Seattle, and other congested cities. The advertising, though still in development, will emphasize fuel efficiency, safety and quality. Smart is, after all, part of the Mercedes-Benz car group.
The DaimlerChrysler executive did not disclose the car's projected gas mileage. On its Web site in Britain, a Smart coupe is listed as getting 46 miles to the gallon in the city and 69 miles to the gallon on the highway.
In Europe, DaimlerChrysler offers a diesel engine as an option for Smart, but in the United States it will offer only a gasoline engine. The company will assemble the car at its plant in Hambach, France.
Smart will not be the only extreme subcompact darting in and out of traffic on American city streets. Honda has had success with its new Fit, as has Toyota with the Yaris. DaimlerChrysler notes, however, that the Fortwo is the only mass-produced car in the world that is less than 3 meters (roughly 9 feet) long.
That makes Smart small enough for two of them to squeeze into a single standard parking space — or for drivers to park it perpendicular to the curb without protruding beyond other parked cars, a practice that is forbidden in some cities.
Some experts said that DaimlerChrysler should promote Smart's European styling and corporate ties to Mercedes.
"They ought to play it like a baby Benz," said Joel Barker, an author and expert on business trends. "The Smart car just has a style to it that these other cars don't have. They don't have the cachet."
DaimlerChrysler believes Smart's experience in Canada, where it has been on sale since 2004, augurs well for the United States. The company sold more than 4,000 Smart cars in Canada in 2005, twice the projected number. The company will not announce a sales target for the United States, though it hopes to exceed the Canadian figures.
To succeed, however, Smart will have to avoid the missteps that have dogged it in Europe. The car's sales here have been held back by its relatively high price — typically around $12,000 for a basic model in Europe — and by its cumbersome dealer network, which had been kept separate from Mercedes dealers. Smart does not plan to use Mercedes dealers in the United States either, but will rely on a separate distribution company instead. In Canada, prices for Smart cars start at the equivalent of about $15,000. American prices have yet to be set.
DaimlerChrysler has pledged that Smart will turn a profit next year. Having cut its fixed costs by 46 percent and its number of employees to just 450 from a peak of 1,300, the company said it was on track to do that.
Analysts who were dubious about Smart's survival six months ago are now ready to give it a chance, even in the land of S.U.V.'s.
"It could be a fancy product for urban markets," said Arndt Ellinghorst, an analyst at Dresdner Kleinwort in Frankfurt. "But just bringing the Fortwo to the U.S., without a plan beyond that, would not be a sufficient business model. They should use the Fortwo to test the brand."
FRANKFURT, June 27 — Are Americans finally ready to get Smart?
DaimlerChrysler, which shelved an earlier plan to bring its Smart mini-car brand to the United States, plans to announce on Wednesday that it will introduce the tiny, two-seat vehicle to the American market early in 2008, according to several executives at the company.
The German-American carmaker is calculating that with stubbornly high gasoline prices, mounting concerns about global warming, and waning interest in sport-utility vehicles, consumers in the United States will welcome a car that is no larger than a good-sized riding mower.
"Now is the right time to go to the U.S.," said a senior executive at DaimlerChrysler, who spoke on condition of anonymity because the plans were not yet public. "The world, and the U.S., has changed in the last two years."
The Smart car has won a hip image in European cities like Rome and Paris, with their serpentine streets and snug parking spaces. It was recently featured in the film "The Da Vinci Code," as well as in the remake of "The Pink Panther," in which it served as the ride of choice for Inspector Jacques Clouseau.
But DaimlerChrysler's management of Smart has been almost as hapless as the fictional French policeman's driving habits. Since the first car rolled off the assembly line in 1998, Smart has lost $3.6 billion, according to analysts. Efforts to expand beyond the two-seat model, known as the Fortwo, have misfired — sometimes undermining Smart's image as a new-age city car in the process.
Among the stranger ideas, now discarded, was to introduce Smart to the United States in the form of a pint-sized sport-utility vehicle. "It's clear that no one is waiting for another S.U.V.," the executive said.
After heavily promoting Smart's arrival at the Detroit auto show in early 2005, DaimlerChrysler decided to hold off on an American rollout. In April 2005, it announced it would eliminate two models — the ill-conceived S.U.V. and a widely derided roadster — and lay off 700 employees.
Dieter Zetsche, the chief executive of DaimlerChrysler, considered selling the Smart line to another company, before settling for yet another overhaul last March that trimmed costs further and eliminated the poorly selling four-seat model, the Forfour. That left only the original Fortwo. That is the car — equipped with extra emission-control and safety features — that will be sold in the United States.
DaimlerChrysler plans to market the Smart to drivers in New York, Los Angeles, San Francisco, Seattle, and other congested cities. The advertising, though still in development, will emphasize fuel efficiency, safety and quality. Smart is, after all, part of the Mercedes-Benz car group.
The DaimlerChrysler executive did not disclose the car's projected gas mileage. On its Web site in Britain, a Smart coupe is listed as getting 46 miles to the gallon in the city and 69 miles to the gallon on the highway.
In Europe, DaimlerChrysler offers a diesel engine as an option for Smart, but in the United States it will offer only a gasoline engine. The company will assemble the car at its plant in Hambach, France.
Smart will not be the only extreme subcompact darting in and out of traffic on American city streets. Honda has had success with its new Fit, as has Toyota with the Yaris. DaimlerChrysler notes, however, that the Fortwo is the only mass-produced car in the world that is less than 3 meters (roughly 9 feet) long.
That makes Smart small enough for two of them to squeeze into a single standard parking space — or for drivers to park it perpendicular to the curb without protruding beyond other parked cars, a practice that is forbidden in some cities.
Some experts said that DaimlerChrysler should promote Smart's European styling and corporate ties to Mercedes.
"They ought to play it like a baby Benz," said Joel Barker, an author and expert on business trends. "The Smart car just has a style to it that these other cars don't have. They don't have the cachet."
DaimlerChrysler believes Smart's experience in Canada, where it has been on sale since 2004, augurs well for the United States. The company sold more than 4,000 Smart cars in Canada in 2005, twice the projected number. The company will not announce a sales target for the United States, though it hopes to exceed the Canadian figures.
To succeed, however, Smart will have to avoid the missteps that have dogged it in Europe. The car's sales here have been held back by its relatively high price — typically around $12,000 for a basic model in Europe — and by its cumbersome dealer network, which had been kept separate from Mercedes dealers. Smart does not plan to use Mercedes dealers in the United States either, but will rely on a separate distribution company instead. In Canada, prices for Smart cars start at the equivalent of about $15,000. American prices have yet to be set.
DaimlerChrysler has pledged that Smart will turn a profit next year. Having cut its fixed costs by 46 percent and its number of employees to just 450 from a peak of 1,300, the company said it was on track to do that.
Analysts who were dubious about Smart's survival six months ago are now ready to give it a chance, even in the land of S.U.V.'s.
"It could be a fancy product for urban markets," said Arndt Ellinghorst, an analyst at Dresdner Kleinwort in Frankfurt. "But just bringing the Fortwo to the U.S., without a plan beyond that, would not be a sufficient business model. They should use the Fortwo to test the brand."
