It seems that up until the present time, we have assumed the following:[LIST][*]20,000 smarts will be sold in the US in 2008[*]the reservation list is 42,000[*]drop out is 20 -30% of reservationists[*]smart will follow the reservation list
This assumes also that smart will honor the reservation list and not ramp up production to higher levels.
I think that smart will ramp up production based on the response after debut. They will not rely soley on the net reservationists (those reserved minus those who choose not to config/take delivery). They will begin to produce the most popular models with the most popular options/packages and offer them to reservationists first, and then to the general public. It is easier to produce blocks of cars based on predetermined options/packages that they think will sell. Remember back to when you've bought previous cars. Do you want to wait until the exact model/color/options combo comes in, or are you willing to take what they have on the lot today? If you turn it down, there is probably some other buyer waiting in the wings to buy it. I also thing that the reservation list is skewed geographically. Take a look at the dealer map. It is very likely that later reservationists will receive a call/email/car earlier than those in the less dealer-intense areas. From everything I've read, smart is going to focus on the metro areas for their biggest impact. Those dealers will get the highest allocations. Any thoughts on this?
This is essentially a city car, for all it's other virtues and that is how it is initially being marketed. It may become a fashion accessory for a while but because of it's size the market will always be strongest in urban areas.
And become more known too, there will be an influx of buyers.
We are the early adopters and car fanatics that put our money down on something we had not seen. We are not a good example of the general buying public.
Plus there are those people who are driving something already, and are not ready to buy a new (and in a short while - used) vehicle, and there will be plenty that find what the SMART offers will fit there needs.
What else is out there that is small and fuel saving in the cost range as this car?
Driving this vehicle will be like the Segway was when it was new (and still is today) you get a lot of people stopping you and talking to you about it, asking where you use it, how much it cost, do you like it, have you had any trouble with it, and so much more.
I agree that it's essentially a city car. I thing that smart will follow the reservation list early in it's debut, but may falter and follow a geographic based strategy sometime after debut. I think they'll be marketing to the consumers in metropolitan areas. Take a look at the CA markets - a large number of dealers in a congested geographic area. Same is true in my marketplaace. I live in western CT, right on the NY border and in commuting distance to NYC. We call this the tri-state area (NY,NJ,CT). Densely populated, lots of commuters. I have 3 smart centers within one hour of me. I think that smart will ramp up production based on demand. Let's not forget that this is a capitalist market. Is the current factory working 24/7? Even with the French 35-hour workweek, they'll put on a 2nd and 3rd shift if needed. The workers are there in France. France has a higher unemployment rate than the US and the area of France the plant is in is being harder hit by the economy than others. Workers in my opinion are not a problem (I have relatives there). I think that after the initial reservationists (club 1173) have been served, that he other numbers will be blurred. Not that they won't be served, but that they'll wait longer than the metro areas.
I think that smart will ramp up production based on the response after debut. They will not rely soley on the net reservationists (those reserved minus those who choose not to config/take delivery). They will begin to produce the most popular models with the most popular options/packages and offer them to reservationists first, and then to the general public. It is easier to produce blocks of cars based on predetermined options/packages that they think will sell. Remember back to when you've bought previous cars. Do you want to wait until the exact model/color/options combo comes in, or are you willing to take what they have on the lot today? If you turn it down, there is probably some other buyer waiting in the wings to buy it.
smart already has confirmations for at least the first half of the year and maybe more. They also have a big pool of reservation holders to send confirmations to. If spdickey is correct, confirmations will now be sent out approximately six months before delivery. That is enough time to build and ship them. As long as they have that pool of reservation holders to keep the order pipeline full, there is no need to build cars on spec.
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I also think that the reservation list is skewed geographically. Take a look at the dealer map. It is very likely that later reservationists will receive a call/email/car earlier than those in the less dealer-intense areas.
smart has already said that reservation order and your location determines when you get the confirmation invite.
smart has already made it painfully aware to me that later reservation holders will receive their car before I receive mine.
My point is that they will begin to build cars on spec based on the initial and ongoing response to the smart debut. Once the dealers are open, cars are on the road, and "unique/interesting car" marketing begins, the ordres should increase. They will gauge the demand and begin to produce to meet the demand. They will of course meet reservationist orders, but I don't thin they want their sales staff sitting around delivering slam-dunk reservationist orderss. They want them writing new orders and will ramp up production to meet it. Also, I think that PAG is keeping expectations of low - they really plan to exceed expectations.
I think their statement is somewhat erroneous. I believe that if demand in the US is greater than expected, then smart will ramp up production to meet the demand. If plant production is already at 3 shifts per day, I would agee that they are at capacity. But I believe that they are not at capacity at the plant and could easily put on more workers and shifts to meet not only the US demand but the continuing European demand. I think that the smart corporate statements of recent days tend to underestimate demand and therefore revenues and net income. Be aware that these are estimates shared with investors. I think that they plan to exceed expectations and therefore drive their stock price higher. Take a look at how APPLE exceeds market expectations each quarter and drives their stock price higher.
I think their statement is somewhat erroneous. I believe that if demand in the US is greater than expected, then smart will ramp up production to meet the demand. If plant production is already at 3 shifts per day, I would agee that they are at capacity. But I believe that they are not at capacity at the plant and could easily put on more workers and shifts to meet not only the US demand but the continuing European demand. I think that the smart corporate statements of recent days tend to underestimate demand and therefore revenues and net income. Be aware that these are estimates shared with investors. I think that they plan to exceed expectations and therefore drive their stock price higher. Take a look at how APPLE exceeds market expectations each quarter and drives their stock price higher.
The plant is on two shifts of French factory workers. Adding a third shift is a real big deal in France, once they are hired its pretty hard to get rid of them.
An additional issue that limits how many cars that they can bring into the country is the number of dealers.
Also, no one knows how well they are gonna sell once the novelty wears off. Maybe everyone is gonna decide that something like a Prius or a Fit is a better car for them and almost all smarts sold end up with the hard-core smarties and then low sales after that. It would be silly to build out a dealership network larger enough to handle the kind of numbers that is being suggested here and then have no one buy.
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