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Smart Customers Canceling Orders
It's increasingly difficult to ignore the automotive industry's predicament, and that conversation has pre-empted talk of the 2009 smarts coming to the local smart centers showrooms, but about the declining auto industry. The petite car was a major star in luring shoppers into smart center showrooms, most of which sell additional makes and models.
The smart car helped boost sales of the dealers' other brands, and for 2008, smart USA centers sold 24,622 units in the United States, making America No. 3 "in the world" in smart car purchases.
David Schembri, president of smart USA, expects sales of Smart cars to reach about 25,000 in the U.S. in 2009.
However, since October 2008 there has been a significant increase in Smart ForTwo cancellations. And with all cars sales down 41 percent from last year, even more cancellations are foreseen.
Others are canceling due to the drastic decline in the cost of fuel compared to last year.
Many who ordered a smart were never notified "of the delivery schedule" and numerous customers, who paid their $99 reservation fee, dating back as far as 18 months, haven't heard anything (for various reasons) about taking possession of their new smart.
The lack of communication also factors into the increasing number of Smart Fortwo cancellations.
Internet Brands and the Penske Group had issues with their ordering system and confirmation process. The system required customers to order the Smart ForTwo through smartusa.com in care of Internet Brands.
The confirmation process, in our opinion, jump-started what became the smart orphan program.
Smart USA, the official U.S. distributor of the cars, discouraged centers from starting an orphan list, but most centers elected to use one.
According to smart USA, the list was to be used only when a customer who ordered a Smart and changed his or her mind. The vehicle then would end up on the dealer's inventory and be made available for sale. This was known as the Smart orphans program.
Once the Smart orphan program gained momentum in mid 2008, customers could purchase the car without much wait.
Because of the program, certain smart centers started charging extra (up to $3,000 in some cases) for dealership add-ons and for the privilege of buying a smart without much wait. They also offered a place on their orphan list, allowing for shorter wait times for a particular model.
In many cases, customers had to write a check for as much as $2,000 just to get on an orphan list. And others told us they "paid extra" to get their smart car immediately, while reservation-holders waited.
All of these techniques and procedures had drawbacks when it came to the distribution of the Smart ForTwo and were not completely fair.
In fairness to smart USA, the Penske Group and most of the participants of this car launch, we need to remember several things.
The car itself was so unusual, 98 percent of American's had never seen one.
This was an introduction of a completely new car brand and model, something the automotive industry hadn't tried in years.
The car was in high demand with an overexcited and impulsive buying public. Others might have taken advantage of the situation, as car companies have in the past with high-demand cars.
Another amazing fact is that less than two years ago, there was not a single distribution (dealership) center in the United States for these cars.
We thank them, and I believe a service was done by all, and I'm sure with the brain trust behind this great car, we'll see bigger and better things coming for the Smart Fortwo, smart USA and the Penske Group.
Unfortunately, we have started receiving numerous requests for refunds from people who paid a $99 reservation fee to reserve a Smart ForTwo. We apologize for any inconvenience and have supplied details on how to get a refund. Click Here.
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