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Originally Posted by ft.com 12/17/2007
Americans will soon have their first taste of the Smart car, nine years after Daimler's eye-catching run-about made its debut on European streets.
The German carmaker believes its decision to wait so long before entering the world's biggest market will prove rewarding.
"America has never been more ready for a car like this," says Dave Schembri, president of Smart USA, the car's distributor.
Next month's US launch is a critical part of Daimler's rescue plan for Smart. For all its pizzazz, the little car has been a financial millstone. Daimler came close to shutting down Smart last year, but opted instead for a €1bn ($1.44bn) restructuring aimed at making the business profitable by the end of 2007.
Smart's green credentials are an obvious selling point across the Atlantic. Its fuel consumption is better than the 35 miles per gallon standard, now making its way through Congress, that other carmakers will have to achieve by 2020.
Smart is also relying on American consumers' one-upmanship to attract buyers.
Until now, Mr Schembri observes, only drivers of Ferrari or Corvette sports cars could expect a thumbs-up from fellow motorists at a red light.
But from next month, "the neighbours will come running over to look at your Smart car".
John Wolkonowicz, analyst at Global Insight, a consultancy, says that Smart will sell well in "a handful of trendy, left-leaning cities, like Boston and Seattle".
But unless petrol prices more than double, Mr Wolkonowicz predicts that most Americans - even many city-dwellers - will be nervous of driving a Smart car on roads filled with huge tractor-trailers, sports utility vehicles and pick-up trucks.
"People value their safety more than a few less dollars on their fuel bill", he says.
Smart USA has collected $99 deposits - and valuable marketing data - from more than 30,000 prospective buyers. Based on these enquiries, Smart cars will be made available at outlets in such unlikely places as Omaha, Nebraska, and Jackson, Mississippi.
About 7 per cent of those people who paid deposits have subsequently asked for their money back.
On the other hand, 9,000 have moved closer to a firm order by choosing a colour and other options for their vehicle.
The favourite colours so far are metallic blue, red and yellow, which might be a sign that the wish to stand out in a crowd will be a big Smart drawcard.
Mr Schembri declines to disclose sales targets. One pointer is Smart's experience in Canada, where the car has been available since late 2004 and where sales normally run at 8-11 per cent of the US.
Smart sold 3,023 cars north of the border in 2006, implying annual sales of about 30,000 in the US.
However, small cars tend to be more popular in Canada, and Smart demand has slipped significantly this year.
Still, Dieter Zetsche, Daimler's chief executive, has predicted that the Smart assembly plant in Hambach, France, would not be able to produce enough vehicles to meet US demand in 2008.
Copyright The Financial Times Limited 2007
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