Driving Smart in the U.S.

Customers look over Smart Fortwo cars at the Smart Car dealership in Bloomfield Hills, Mich., Thursday. The dealership is one of 68 in 31 states expected to open this month to sell the 8-foot, 8-inch micro car.

The Associated Press
Published: Friday, January 18, 2008 at 6:01 a.m.
Last Modified: Thursday, January 17, 2008 at 9:22 p.m.

BLOOMFIELD HILLS, Mich. - Americans who want to drive Smart like their European and Canadian counterparts are finally getting their chance.

The flagship dealership and corporate headquarters for Smart USA opened Thursday afternoon in the Detroit suburb of Bloomfield Hills. The dealership is one of 68 in 31 states expected to open this month to sell the 8-foot, 8-inch Smart Fortwo micro car.

Smart is a division of Daimler AG's Mercedes-Benz brand, and its cars have been sold for nearly a decade in Europe.

The French-made vehicles are being sold through U.S. dealers that are part of Penske Automotive Group Inc. Roger Penske, a racing icon and chairman of Penske Corp., also is chairman of Smart USA.

Hundreds of Fortwos were shipped out of ports in Maryland, Florida and California and have been arriving at dealers this week. And Smart has been contacting the 30,000 people from all 50 states who plunked down $99 to reserve the tall, round yet tiny two-seater during the past year. The first car was delivered to a New York buyer on Wednesday.

"I think it's really an amazing accomplishment by our associates and dealers," Smart USA President Dave Schembri said. "A year ago, there was not one dealer, not one customer, no cars in the U.S. and relatively low awareness. . . . Our thinking when we developed the business plan that America has never been more ready for a car like this seems to be a reality."

The Smart's base price is more than $12,000 with destination charges included. A fully loaded Smart Fortwo Passion convertible goes for more than $17,000 with those charges.

He said customers have responded well to the reservation system, which was part of a nontraditional marketing campaign last year that included 50,000 test drives in 50 cities. Smart will continue the reservation process in the dealerships.

Delivery time will vary depending on where people live.

Smart has a steel safety cage and four air bags, including two in front and two on the sides to protect the head and abdomen. It also has standard electronic stability control, which is designed to stop vehicles from swerving off the road.

The 1,800-pound car gets 33 miles per gallon in the city and 41 miles per gallon on the highway.

Roger Stam, 60, was the first Michigan resident to receive a Fortwo. The White Lake Township resident, who received his keys and ceremonially drove his convertible out the dealership's door on Thursday, said he first saw a Smart a few years ago in Canada and made his reservation to buy one in March.

The database administrator for automotive supplier Yazaki North America Inc. said he sought a car that would ease his pain at the gas pump but still offer some style.

"There's a lot of small cars on the market and fuel-efficient cars but this one appeared to have a fun factor and you could get it in a convertible," said Stam, whose 6-foot-3 frame easily fit into the car.

"Personally, the downside was I waited a long time from the time I made a decision and the time I got a car."

Schembri said the timing is right for Smart cars, given consumers' growing preference for higher fuel economy in the face of high gas prices and smaller cars to deal with urban congestion - while not sacrificing safety.

But even in Europe, Smart never has been profitable.

Daimler announced a restructuring of the division in 2006, when sales fell to 102,700 vehicles worldwide from 124,300 in 2005.

Aaron Bragman, an analyst with Global Insight, said he doesn't see the Smart Fortwo selling well beyond about two years, when he predicts the novelty will wear off and "all those who want one have one."

"For me, it boils down to the business case for buying one," he said. "For $13,000 to $15,000 on average - as high as $18,000 for a convertible - you're getting two seats, almost no cargo room and good but not stellar mileage," he said.

Schembri said Smart USA is confident in its business plan and has saved millions of dollars by opting for a "below-the-line" marketing effort instead of a traditional advertising campaign.

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