Below is an article in today's "Tennessean" (Nashville newspaper)
http://www.tennessean.com/apps/pbcs....=2008803260414
The Smart ForTwo micro car is now on sale across the United States, but there is no dealer yet in Nashville and probably won't be until sometime next year, the U.S. importer says.
Some Middle Tennessee consumers, eager to have one of the little two-seat gas-sippers from Europe, have bought the cars from the only dealer in the state, Smart Center of Knoxville.
Announcement of a dealer for Nashville is "still about two months away," Smart USA spokesman Ken Kettenbeil said. Last fall, Kettenbeil had said a Smart dealer was likely to be announced before Thanksgiving. On Tuesday, he wouldn't say what has caused the delay here.
He would not speculate on who will get the Nashville franchise but added that it's not likely to open this year. The company said 67 dealers have opened out of a planned 74.
Dealers and auto analysts say the cost of opening a Smart store — estimated to run at least $700,000 — is hard to justify when gross profit on each vehicle sold is $1,000 or less, and the cars are in very short supply.
Prices begin at $11,590 for the base model, and its three-cylinder engine gives it fuel-economy ratings of up to 41 miles per gallon.
Smart USA, the independent distributor appointed by Smart parent Daimler Benz of Germany to be the exclusive importer of the cars in the United States, began taking reservations for the cars last summer on its Web site.
Chief Executive Roger Penske told reporters at the New York auto show last week that he expects to get only about 25,000 of the cars this year, but would like to get 15,000 more from Daimler, which also makes Mercedes-Benz vehicles.
"We're all screaming for more cars, but it doesn't look like we're going to be getting any significant numbers anytime soon," said Buck Arnwine, sales manager for the Knoxville store.
At the other store closest to Nashville, the Smart Center in Louisville, Ky., manager Will Swope said his company has sold just 35 cars since opening Jan. 14, but is expecting to get about 35 more in April. All of those have been pre-sold.
In fact, all of the cars that will arrive at U.S. dealerships over the next year or so are promised to buyers who paid $99 for a reservation. While some who signed up have since backed out, plenty of others are waiting for the cars, dealers say.
Some dealers are wary
Making a business case for a Smart dealership would be difficult for most dealers, said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book. "They are coming at a good time, with the high fuel prices. But there is a fear it could be a flash in the pan."
For now, Smart offers only the two-seat model, which is 8 feet, 9 inches long. A four-passenger version that had been planned for the U.S. market has been dropped.
"The longevity of the Smart brand in the United States will depend on their ability to offer more than one model down the road," Nerad said. "But I'm hard-pressed to think that a two-seat vehicle as a lone model can sustain a dealership, especially a low-priced vehicle."
At the Louisville store, which is a stand-alone operation, the company does not expect to make a profit selling new Smart cars, Swope said.
Swope said the markup on the Smart car is only about $1,000, and dealers have fixed costs that come out of that meager gross profit.
The prospect of losing money probably is why no one has stepped forward yet to put a dealership in Nashville, Nerad said.
Swope said Smart customers have ranged from young bargain hunters to more affluent customers.
"Some of the buyers have been people who might have bought a Kia or Hyundai, though, because of the price and the fuel economy," Swope said. But others, he said, are also customers of his Lexus dealership next door.
"This is a toy car for the affluent," Nerad said. "Some are buying it so they'll have a green car. But for these people, it's a third or fourth car in the family."
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