Drop Out Rate

[chillistains]

I would be very interested in knowing how many people on the list will actually do the deal. It's one thing to get excited about this car and put up $99 and another to reach for your wallet for as much as $20k when the time comes. The ecomony is changing and people's priorities change over time. Also there may be some that need another car now and can't wait. This could make the orphan lists much more of a factor. I'm going to take a wild guess that the drop out rate could reach 20%. What do you think? Let's consider this. A guy with his name on the main list adds it to one or more orphans lists. He get a call because of the orphans list. He buys. What just happened? Two buyers are gone and at least three names are gone. One "buyer" who didn't is off the list and the one that did with his name on at least 2 lists is gone. One car is added to the road. When Smart dealers talk about wait times, I'll bet they assume every name on the list will buy. I think that because they won't, things will move faster than quoted. What do you think?

[SmartBob]

Rumor is 20%. I couldn't see putting $20K for this car. My whole point in buying small is saving $$ not spending. I ordered a Pure with Stereo, Alarm and A/C and that's it. If one is worried about gas prices then logic dictates $$ budget is an issue. If you spend $24k++ for a hybrid just to save money on gas you're missing a point about saving money. If you can afford that much for a vehicle you can afford $3 a gallon for gas. I'm single and of moderate financial means. Nothing can touch the Smart to get quality and economy in the same package. Turns out, fun is a bonus factor with this fortwo and I'm looking forward to that as well. Just my 2 cents. Not looking for arguments or debate...it's only an opinion

[Big Panda]

my personal thought on this is that the 'drop out rate' will be much higher than 20%. it's unfortunate, but Americans are generally an impatient bunch and want things NOW. on top of that, factor in those whose need for a new car is more pressing and wham! you have a much higher number of 'orphans' available.

also, i think after a while, the 'novelty' of the Smart will wear off. after all, it's not very practical (room for only 2, no storage space to speak of), doesn't get the MPG's that even a Toyota Yaris gets, let alone the shortest warranty period i have seen. i'm beginning to think it's Christmas and the Smart is just the newest 'toy' that everyone has to have, but can't get! sorry.......

[SmartBob]

All valid points. I still have second thoughts from time to time. Then I go visit the cars and get new inspiration.

The fortwo is being marketed as a city commuter so it IS practical for what it was meant to be. Most of our members seem to be buying as a second car to leave their SUVs and vans in the garage for when they need to taxi the kids and sports equipment.

Mileage however? Yaris claims 30/36 for 2008. Many of our members are seeing 37-42 mpgs mixed driving....I imagine in the near future with some inexpensive mods (cold air intake, etc.) one could push the std mpg near 45 pretty easily.

[SnakeFarm]

Originally Posted by chillistains

When Smart dealers talk about wait times, I'll bet they assume every name on the list will buy. I think that because they won't, things will move faster than quoted. What do you think?

SPOT ON Stains! If all reservations blew off the 99 bucks and just got "orphans" the drop-out rate could be OVER 100%! and "reservation-holders" would STILL not be any closer to getting a car.

For a company named Smart, they shure have a dumb system. Maybe THAT'S why they insist it be spelled with a little "s".

Reserved Sep 2007/1363.
No configuration invitation yet.

[Old smart]

Originally Posted by Jeepster55

my personal thought on this is that the 'drop out rate' will be much higher than 20%. ...

Some time ago, Penske quoted a number of 7%-8% of $99 reservers were asking to bail out (call it initial 7-1/2% attrition, or 92.5% left). Later, Dr. “Z� quoted a number that 90% of the remaining reservers were expected to transform their reservation into a configuration, adding another 10% to attrition (so then up to 17-1/2% attrition, or 82.5% left). Now crank in yet another 20% loss at the dealer and you have 37-1/2% of original reservers gone, or 62.5% left. Well, not exactly: 0.925 x 0.90 x 0.80 = 0.666 (2/3s) of the original number left. To muddy it a little more are the orphans going to early reservers, late reservers, or perhaps non-reservers. At any rate, the attrition has been significant.

Based on PAG/smartUSA reservation numbers (to the closest 100s) declared on either side of my reservation date of 25 JUN, I reckon my number in line without attrition as #20,100, but with believed combined attrition, now effectively #13,400. With the recent “dealer leveling� distribution, I could be anything in my particular area.

[Bremer Speck]

Jeepster, the Smart is a lifestyle car and the novelty has not worn off in 10 years of production and sales in the rest of the world. Over here, it helps to prepare Americans to (finally) get used to small(er) fuel efficient cars. $3.00 per gallon? You have seen nothing yet!

[cmjars]

I think the dropout rate is higher in some areas and lower in others.

Take for instance where I live (Los Angeles) the Writer's Strike had a huge financial impact and I would argue that the dropout rate is much higher than 20% right now as the industry is just getting back to work and alot people who reserved a year ago now are thinking financially this car makes no sense for them. I also believe our high dropout rate right now is only temporary for the next few months. Once the dough starts rolling again it will be like... what strike

I'm sure for the above reasons I was able to get an Orphan.

Just my 2 cents.

-Chris

[Smartdavis]

Originally Posted by chillistains

When Smart dealers talk about wait times, I'll bet they assume every name on the list will buy. I think that because they won't, things will move faster than quoted. What do you think?

Some things are already moving faster (i.e. orphan sales) but there are still people getting on the reservation list, and from what we can tell it's still pretty long (something like 26 months worth of names at my dealer, but as you said they may be counting on all of them to buy). If anyone wants a car quickly the orphan route is still the best way to go. Otherwise if you reserve today you probably aren't going to see your configured car until 2009 and that is a pretty interesting marketing problem for Smart. Demand is probably increasing as more people see the car on the road? My car attracts a fair amount of attention and questions everywhere I go, so the first cars out there are probably creating more reservations. It seems like the car is going to be very successful at the production numbers that have been announced so far.

[chillistains]

OK my twisted mind is at again. I'm wondering "What are the rules for an orphan list?" As I understand it, the list is under the control of a local dealer. He could set any rules he wants. For example, why couldn't he say his list is not time-on-the-list dependent, it is matching the car to what someone is looking for - model, color, etc. He then calls this person and says "I have your car NOW and you can have it for just 10% OVER sticker and save 8 mos of waiting." Why not? It's just good business. Since when are car dealers good guys? As I see it, this whole thing could get way out of control. Interesting to see if corporate gets involved with their dealers and sets some rules on all of this. Or maybe they don't care - they sold a car and that is all that matters.