Smart Four-Seater

The Smart - An Expensive Flop?
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Photo: Time - Ludovic Marin REA/SABA Photo quality set low to keep web loading time short Photo text: Time

HEAD OF THE CLASS: Smart may be the car of an automotive future which never arrives

Article from TIME April 26, 1999 p.68, section BUSINESS & FINANCE A Slow Start for Smart The much hyped concept car, designed for the city, is having trouble getting out of the parking lot	.
BY BRUCE CRUMLEY PARIS

IN 1994, WHEN SWATCH MAKER SMH Automotive and Daimler-Benz announced their joint venture to produce a micro compact, gasoline-and-battery powered vehicle known as the Swatchmobile, they confidently predicted it would revolutionize the production side of the industry while also transforming the car-driver relationship. Five years down the road, though now powered by a gasoline engine, the renamed Smart car has indeed been at the forefront of changes in the way cars are assembled. But its impact on the romance between car and driver has hit a major roadblock - Europeans don't seem interested in even going out on a first date.
Given that disappointing consumer response to the vehicle, the wisdom of mass producing a short, trunkless, two-seat car has been seriously questioned since it was rolled out on Oct. 2 ((1998)). Smart car producer Micro Compact Car, now wholly owned by DaimlerChrysler, had expected to sell 130,000 units this year, Intended as a snazzy, fuel-stingy, state-of-the-art, second car for affluent city dwellers, barely 10,000 Smart cars rolled out of dealer showrooms in the first three months of this year after 20,000 sold in 1998.
In the wake of that desultory debut, MCC slashed its 1999 sales estimate to 100,000 and cut the original Smart price range of $9,566-$11,400 to $8,983-$10,883. The company also closed its manufacturing facility in eastern France from March 22 to April 4, but preferred to attribute the move to implementation of the nation's new 35-hour workweek.
Just getting the car to the 110 Smart Center dealerships in nine European countries involved a difficult journey. MCC's innovative, modular factory in Hambach, for starters, was blocked up when one of the 13 on-site supplying and assembling partners decided to wind down its automotive activities. Then it was learned that the Smart shared similar stability problems with Mercedes A-Class cars. The corrective measures delayed the launch of the car by six months and involved a tightening of the suspension system that some critics say now transmits road shocks more directly to the driver. And along the way Swatch, which had seen its original concept of a chic, environmentally conscious concept vehicle morphed into a more conventional auto, gradually ceded its stake in the project to Daimler-Benz (now DaimlerChrysler).
"But the real problem with the Smart," carps a Renault spokesman, "is that most people aren't going to pay for a two-seat city car when they can have a four-seat city and highway car of roughly the same size, for roughly the same price." Renault's Twingo and models like the Fiat Seicento and Ford Ka do indeed call into question the economic logic of Smart. Still, Bart Vos, an analyst in Paris for the Arthur D. Little management consultancy, believes the Smart remains a valid long-term project that has run into snags expected of a new product category, as well as changing market considerations. "The Smart project was conceived at a time when municipal and national governments across Europe were making a lot of noise about tackling the plague of clogged city centers and attendant pollution problem," Vos recalls. "What people forget - and what MCC has failed to communicate - is that the Smart is a transportation concept, not just a car."
That concept calls for the Smart to be driven as a city car, but left at home while owners use rail or air travel bought at preferential, Smart-associated rates. National rail companies in Germany and Switzerland have half-price fees for transporting Smarts with owners to their destination. ((Car rental company)) Avis, meanwhile, offers discounted rates to Smart owners for traveling to destinations without their car, as well as weekend rates at home for larger vehicles.
"It's a new manner of thinking about cars and travel," explains MCC spokesman Wolfgang Reicke. "We've invented a new concept, a new, modular, partner-based production process, a new distribution System, as well as a new brand of car. We knew there would be problems and changes to be made, but we're confident well succeed in the end."
In addition to lower sticker prices, changes have included offering more features as standard on Smarts, as well as diversification of the line to include diesel engines later this year, convertibles next spring, and even a four-seat Smart within few years. "I think well see the Smart undergo a lot of alterations over time," says Ahmed Benabadji, who with Vos has closely followed the Smart launch for the Little consultancy. "But it needs to really define its market and communicate effectively to it. That will take time, but that's what makes Daimler an ideal partner: it has money, patience and something important to learn from the process."
In announcing its 1998 results earlier this month, DaimlerChrysler stressed its long-term commitment to the thus-far $1.55 billion bet that the micro compact market will be the future of the industry. If so, chances are the Smart's groundbreaking experience will put it and its partners light years ahead of the competition. If that market refuses to materialize, however, the Smart may wind up as the most expensive revolution that never was.
End of Article - as usual remarks in ((blabla)) , but (blabla) belongs to original text.
Personal comment by MBEP webmaster:
The above article is an excellent analysis of the problems around the Smart.
To me it was clear from the very beginning that the two seater Smart would be a flop. The market for such a relatively high-priced two-seat-only car simply isn't 130.000 units a year (and I don`t comment about the 200.000 units planned first...), not even European-wide.
Daimler-Benz was aware of the problem of selling enough cars and even before the presentation of the Smart tried to push the German government to change road laws: On the one hand already 16 year olds (as opposed to the 18 years now being the minimum in Germany) should be allowed to drive low-powered versions of the Smart and on the other hand it should become legal to park the Smarts at right angles on the sides of the streets - Daimler-Benz, overrating themselves, failed with both.
Ambition only isn`t enough, Mr. Schrempp, haven`t you learned from the Fokker disaster?!?

More info about the Smart:
^1999: ^{Strike
at Smart Factory}
^{1999:
Smart Roadster Study at `99 Frankfurt IAA}
^{1999:
Smart Four-Seater for Year 2000}
^{1997:
MB stops Ultra Mini Car MCC Smart
- Another Debacle}
...and be sure not to miss the "alternative" Smart site!

Last revised technically: Jan. 25th 2000..Visits since April 24th 1999.

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