I just read this piece over at Autoblog Green where they quote Penske acknowledging the possible loss of sales to other makes due to delivery capabilities. While this is largely true I think this is a great chance for us to voice ourselves in the automotive media are that we want more communication from smart USA.
If you have a chance, please check out the blog and leave a response. I encourage everyone to participate so we can be heard on a larger scale by smart USA.
Based on a few posts here, they've already lost sales, and these from people pretty enthusiastic about the car. I'm sure the 12 month wait predictions have turned off a bunch more. Still not sure how JPaul's info on 1K cars/week for the USA translates into only 25K cars for this market. There's a disconnect somewhere.
Based on a few posts here, they've already lost sales, and these from people pretty enthusiastic about the car. I'm sure the 12 month wait predictions have turned off a bunch more. Still not sure how JPaul's info on 1K cars/week for the USA translates into only 25K cars for this market. There's a disconnect somewhere.
The number I posted/quoted was/is "current" prod. for late February early March, just that. I've asked O. Amélineau to give me figures for total prod. so far, and I'll ask him again about short, mid and long term projections. The latter depends on Stuttgart's priorities. Currently, said O. Amélineau, there is more demand than production in ALL markets. I.e. the Italian customers are also complaining loudly about long wait too, a situation that could be alleviated if Daimler decides to adjust its allocations and reduce the 1/3 currently assigned to US...
We know factually that 45,000 paid $99 reservations by last Dec. We assume the number is most likely over 52,000 paid the $99 to get 22,000~26,000 2008 model smart fortwo cars.
Even if 100% of all 08's are sold via reservations and orphans, there can only be a finite number of 100% satisfied and loyal customers...
Think about that for more then a brief minute.... at the peak estimated maximum imports, the very most at 100% is 26,000 satisfied customers...
I know factually that the totally satisfied number is running well less then 100%
Now, re-look the PAID reservation holder number...over 50,000 and growing
Logically and Mathematically they are generating more dissatisfaction then satisfaction..... already hummm......... think about it.
Frankly they are shooting themselves in the foot, and the brand overall will hurt for it. They saw the result of the unexpected demand in Canada. And that was in a market thats a fraction of ours. It seems they didnt learn their lesson. And now they are going to pay the price. True every car produced will be sold, but they just arent making as much as they should be. They are introuducing the car at a time that couldnt be more perfect for it in terms of the economic climate. But holding back with trickle of cars that are coming in is NOT the right answer for our market, and especially the time. Smart's competition right now is very limited. Its essientally a niche product and by not bringing enough car at the onset means that many a people will be turned off by the brands way of doing buisness and go the way of the Yaris or Versa.
If I didnt love the car so much and was in need of another car, smart for sure would be loosing my buisness.
That isnt exactly a unique situation and one that I am sure many people are facing right now. Smart should have been prepared to ramp up production for the US market. Its not that the US should recieve special treatment because its the US, but because thats the right thing to do when entering a new market, especially one equally ready to accept the product.
Now I am not saying that they should have completley flooded the market with them, but they should CERTAINLY be filling reservations quickly.
Thats where I have animosity with this entire process. To confirm the car, another NON REFUNDABLE deposit should have been required. Most of the time when ordering any other car, this would have been a requirment. This process would have weeded out those with cold feet. And all of us would have gotten our cars that much faster, because their would be alot less "orphans". Then we would have a good amount of very satisfied customers out there, because they KNEW they could take delivery of the car, and they KNEW what they were getting into. By letting the casual person to effectivly order a car to be made, we have alot of cars that were on the assembly line that didnt need to be there. Period.
The reservation system was always broken with this flaw and frankly has left a bad taste in my mouth. I will be sure to let the company know once (IF EVER) I get delivery of MY car.
It seems to me that smart has always been production constrained if they have been on the market in multiple countries over 7-8 years and only produced 750-800,000 cars. Then you add the US which has been chomping at the bit for several years to buy it. It might behoove Mercedes to consider a plant somewhere like Mexico where quality production can be very good and costs low. They should have never intro'd the ForFour, etc. unless they had the production demand taken care of for the base product.
Last edited by MPrice2984; 03-24-2008 at 02:02 PM.
Reason: misspelling
It seems to me that smart has always been production constrained if they have been on the market in multiple countries over 7-8 years and only produced 750-800,000 cars. Then you add the US which has been chomping at the bit for several years to buy it. It might behoove Mercedes to consider a plant somewhere like Mexico where quality production can be very good and costs low. They should have never intro'd the ForFour, etc. unless they had the production demand taken care of for the base product.
The ForFour was Mitsubishi based, really just a reskinned Mitubishi Colt, and while I am not sure where it was built I'm 99% positive it wasn't at the fortwo plant
Limey, I know the ForFour was a reskinned Mitsubishi, however the other models weren't and were based on the City Coupe / For Two. My point is that production has always been low and availability in a bunch of countries seems to have been marginal - like Italy where demand exceeds availability. It seems Mercedes might have been able to sell more cars if they actually made them, 100,000 worldwide per year isn't much.
The ForFour also shared some componentry with the 00-04 Volvo S40 which was actually built by Mitsubishi.
As a strategy for sustaining mid-to-long term sales, I don't see demand exceeding supply as a bad thing - especially when launching a new brand.
Let's imagine the alternative. Smart takes 40,000 U.S. reservations, fulfills all of them immediately, and brings over an extra 20,000 cars so that there is additional inventory on dealer lots for opportunistic sales.
This would bode well for first and possibly second year sales, but would be unwise in terms of growing market demand. The novelty of the car wears off quickly, dealers begin offering discounts and incentives to move cars that have been sitting on lots too long, and those cars change hands at a rapid pace on the second hand market. This is exactly the problem that the U.S. automakers have been facing. Each year they churn out excess inventory far in excess of market demand in order to meet their ambitious sales targets. When the dealers are unable to move the cars, the incentive programs start, and before you know it, the brand has been tarnished as a discount purchase proposition - something you buy based on value for dollar like economy packs of toilet paper as opposed to something you buy because you desperately want it.
In addition, I don't see a direct competitor to the Smart here in North America, so it is not like they are losing sales to a single, obvious competing platform. Maybe if/when we see the Fiat 500 or BMW Isetta over here, things will be different, but for now, the Fortwo is in a class all its own.
I blogged about this over at: http://www.teslafounders.com/ around the time we took deliver of our car ("The Wedge's Edge") and talked about how ingenious I thought the $99 reservation program was.
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