Daimler to Recoup Smart Sales

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Daimler to Recoup Smart Sales
Analyst Blog
Daimler to Recoup Smart Sales


By: Zacks Equity Research
November 16, 2009 | Comments: 1
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DAI | PAG

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Daimler (DAI - Analyst Report) has started offering discounts for its micro-hybrid car, smart fortwo, in the U.S. in order to recoup its depressed sales. In the third quarter, Penske Automotive Group (PAG - Analyst Report), which owns distribution entity for the smart fortwo in the U.S. through its 75 smart dealerships, saw a decline in smart USA wholesale to 3,401 units from 6,683 units in the prior-year quarter.

Last month, smart car’s sales fell more than two-thirds to 661 units in the U.S. It was also the lowest clocked for any month since the car’s debut in early last year.

Smart fortwo – the world’s most fuel-efficient and lowest CO2 emitting car – raised eyebrows in the U.S. with a fuel consumption tag of 36 miles per gallon at the time of its launch when petrol price hovered around $4 per gallon. However, it lost importance over time when the average price slashed by about a third in the recent past.

During the third quarter, Daimler sold 23,600 smart cars, fewer than the year ago level by 8,700 units. Last month, the company’s sales fell 18% to 9,300 smart cars. Sales in the first 10 months of the year went down 14%.

Daimler’s decision to export smart cars to the U.S. was a critical part of its rescue plan for the brand. In 2006, the company began restructuring the brand to make it profitable by 2007 instead of shutting it down.

Presently, Daimler is hopeful about retrieving smart sales as the oil price begins to rise again. However, to what extent the hope will bear fruit remains a matter of uncertainty. Some proponents are of the belief that carmakers would try to comply with fuel-economy standards over the next few years through more efficient engines rather than smaller vehicles. Thus, the company’s effort to regain sales is likely to face many challenges.

We recommend the shares of Daimler as Neutral.

[Big Panda]

Great.....now I'm depressed.

[jimvw57]

WOW!!! I missed something in the owners manual. I didn't know my Pure was a HYBRID!!!

[jwight]

Discounts? As far as I know the MSRP on the cars has not changed.

[Commander Cody]

Read today in Autoweek.com that in '08 around 25,000 smarts were sold in the US. In '09 as of Oct. - 13,000 were sold.

[chieftmc]

Let's all hope they survive !!!!

It would be to own a car with NO support !!!

[fpage77]

That's it time to sale smart is swirling the the toilet bowl of life.

[Orphan-Beggar]

One can only hope that smart finds an advertising spokesman
like Howie Long
GM says it'll pay back U.S. early | Philadelphia Inquirer | 11/17/2009
GM still lost money. The automaker posted a $1.2 billion loss between emerging from bankruptcy July 10 and the end of the third quarter Sept. 30.

[BigWarpGuy]

One would probably get support from Mercedes dealers. The service center at Smart Center Edison - part Ray Catena dealers - support many makes and models of vehicles. There might be lots of spart parts. There were so many spart parts for the Delorean that one can still get a 'new' one made from all the spare parts. Hopefully that will be true of the Smart.

[gabulldogger]

the thought of them not selling in America scares the hell out of me