Daimler Pitches Smart Brand, Although It's Nearly Sold Out

[spdickey]

Originally Posted by Media Post Publications 12/06/2007

AS CONGRESS CLOSED IN ON a bill to raise CAFE standards this week, Daimler AG CEO Dieter Zetsche was in Washington, D.C., to pitch to government and business brass the company's Smart brand, which launches next month the U.S. as Smart USA, a subsidiary of Penkse Automotive Group.

The company began a program this summer allowing Americans to reserve a car with a refundable $99 deposit. Zetsche said the company, which has received 30,000 orders for the Smart ForTwo vehicle, is essentially sold out if 90% of the deposits realize sales.

Ken Kettenbeil, director of communications for the Michigan-based Smart USA--which is the sole distributor in the U.S. for Smart and will be responsible for setting up dealerships--says the goal is 74 dealerships by year-end 2008.

Penske Auto will own eight of them (dealers). "There will be cars available for test drive and in some cases for purchase, but for the most part, we will be fulfilling reservation orders; so it won't be like a Toyota, Ford or GM dealership."

He says the company expects the majority of dealerships--about 57--will open in January, and that all 74 will be in major metropolitan areas, ranging from Chicago and New York to Omaha, Neb. and Jackson, Miss. Smart, which has no ad agency, will support with local marketing tactics, including advertising and grassroots efforts.

http://publications.mediapost.com/in...37063&p=282517

Notice the sell out figure if 90% of reservations go to sales. We now know that the conversion factor will be 80% or below. So that leaves a few cars for dealer sales, rather than just us "dealer pick-ups."

[paul c]

Originally Posted by spdickey

http://publications.mediapost.com/in...37063&p=282517

Notice the sell out figure if 90% of reservations go to sales. We now know that the conversion factor will be 80% or below. So that leaves a few cars for dealer sales, rather than just us "dealer pick-ups."

But doesn't that assume no additional reservations? With the number of (generally) positive reviews published in the last few weeks, the beginning of actual car sightings next month, and with dealers to visit, I would think people would continue to put in reservations as long as the program continues. I'm guessing it'll be well more than a year before a walk-in customer will be able to buy a smart.

[spdickey]

Originally Posted by paul c

But doesn't that assume no additional reservations? With the number of (generally) positive reviews published in the last few weeks, the beginning of actual car sightings next month, and with dealers to visit, I would think people would continue to put in reservations as long as the program continues. I'm guessing it'll be well more than a year before a walk-in customer will be able to buy a smart.

Just talking current numbers, new reservations/new sales would be possible under the numbers discussed above.

Here's some more from the DC event with Dr. Z.

http://www.autosavant.net/2007/12/sm...ll-easily.html

Originally Posted by autosavant.net 12/07/2007

Smart Car Sales in U.S. Will Easily Exceed Forecast

When Penske Automotive Group announced earlier this year that they would be the distributor for Daimler’s Smart car in the United States, their sales goal in the first year was modest at 16,000 units for 2008 calendar year. There were many people that thought that forecast was laughably optimistic. I predicted (in print, mind you) that Smart would easily make their sales numbers the first two years in the U.S., and then find the going a bit tougher.

Smart has taken 30,000 refundable $99 deposits for the car so far. The doubters said, “Well, so what, they’re refundable; let’s just see what the take rate is”. Now we have the news a few days ago that Dieter Zetsche, CEO of Daimler AG, has told reporters that 9 out of 10 deposit-holders have subsequently placed full orders for the Smart. That puts Daimler, Smart and Penske well past their sales forecast as well as their extra production capacity. Dave Schembri, president of USA Smart, says that some cars ordered now will not be delivered until 2009.

Among the many problems an auto manufacturer can have, demand exceeding supply is one of the best, but it’s still a problem. Daimler would like to sell as many Smarts in 2008 as there are people that want one of the cars, but that is not going to happen. We contacted Smart last month to ask them what Plan B was if demand exceeded supply the first year of production as has happened, and they did not respond to us, but one has to assume to assume that production will be increased to some number that won’t be too high (unsold inventory) or too low (unhappy would-be buyers). But what is that all-important second-year sales forecast?

Of course we know "full orders for the smart" were just configurations. No more money has changed hands. Can any say "additional attrition" when the rubber actually has to meet the road?

Not easy hitting that moving target. Be glad for the reservation you got.

[mfoster]

I originally reserved June 16th. I did a second reservation three days ago.