Some thoughts on smarts sales model

[Westfield 11]

I have been reading here and elsewhere of potential buyers who are frustrated by smart USA using the Dell Computer model of sales. As consumers we are not accustomed to waiting so long for our purchases and there is no way to have your newly built car Fed-Ex'd for overnight delivery. I cannot forsee the delivery times falling much below 90 days at best even if they decide to flood the country with cars to satisfy the pent-up demand.

So what does this mean in the long run for us as buyers?

The 1st thing that comes to mind is that the dealer has been reduced to a display and service & delivery center for a fixed price product. In exchange for lower income due to the no negotiation online sales method, the dealer does not have any capital tied up in unsold cars: there is no monthly "nut" for either the dealer or smart USA to meet. This lower expense may go a long way towards compensating for the lowered income mentioned above. It may also be why Penske claims to be profitable on only 30K sales a year. There is an additional savings by moving the sales staff from the local dealer to an online site. We will have to wait and see if this is sustainable in the long run.

The 2nd thought is that the artificial supply shortages created by the long delivery times will make a used smart more valuable than other brand cars. If you can't get a new one from the dealer for months and months no matter how much money you offer, then a nice clean used smart with immediate delivery starts to look pretty good. This will only help those who have cars for sale, one can forsee current owners ordering a new 2010 model, waiting the 3 to 4 + months for delivery and then putting the old one up for sale when the new car arrives. There will always be those who don't want to wait, we may even see an aftermarket in smart Delivery Futures someday: the closer to delivery the greater the premium the contract will sell for on the open market.

Anyone else have any ideas of how this will all shake out?

[propes]

PAG's been pretty up-front that the sales model they're using is experimental - which means there will be hiccups and changes in it over time. I think the real test will be what happens when there's not a huge backlog, like the one created by all the pre-orders.

[saxdiva]

Originally Posted by propes

I think the real test will be what happens when there's not a huge backlog, like the one created by all the pre-orders.

I'm not sure I see that happening anytime soon.

[SmartAzz]

I think that the Smart service model could have an effect on the sales. If any issues emerge with the car or how the service is handled that could have an impact on sales/reservations.

Apparently, from the dealer documentation that had been posted, each location only has to have a minimum of a single certified tech per store which has the potential of rendering service slow and service appts backlogged. Only time will tell of course, but it is just one of those factors that could effect sales down the line.

(The short warranty by this country's standards also doesn't help, could effect resale as well.)

[Smartdavis]

The "salesmen" get paid by the hour. No commissions. They probably get bonuses for great service reviews later in the game. Smart wants to have high customer satisfaction ratings for obvious reasons. They will use whatever model gives them the highest customer satisfaction numbers.

[propes]

I would imagine the required number of service techs would increase as the sales increased in the area.

[SmartAzz]

Originally Posted by propes

I would imagine the required number of service techs would increase as the sales increased in the area.

One can hope, especially considering the large area some dealers are supporting. I can only say from my experience with Mini it took some time before the time to appointment at the local dealer became reasonable (it is about a week to an appt now, a couple of years ago it was more like a month - they even told people to go to other dealers out of the area).

Let's pray every dealer has more then a single certified tech on hand, that just seems ridiculous.

[spdickey]

Right now at my dealer the smart tech is putting the new arrivals through PDI, not a lot of call for breakdowns just yet with only a dozen cars on the road.

[SmartAzz]

Originally Posted by spdickey

Right now at my dealer the smart tech is putting the new arrivals through PDI, not a lot of call for breakdowns just yet with only a dozen cars on the road.

Perfect time for them to get seriously acquainted with the car and tinker with the demos ;)