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Discussion Starter · #1 · (Edited)
Am I reading the numbers right?

Penske said in the video that 8%-9% have requested refunds. He also said that there was an 84% response to the confirmation invitations (leaving 16% without immediate response). Of the late responders, he said the 60% of those ultimately did so (40% didn't). So, 16% x 40% = 6% (6% of those in the game long enough to confirm didn't).

But 8%-9% had already gone AWOL. To me it looks like an 14%-15% attrition rate even before the signning-on-the-line part.
 

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In an article from 11-19 on The Car Connection, Dave Schembri is quoted as saying that so far, about 90 percent have followed through, going online to use smart's digital order form. Only about seven percent have canceled out and asked for their money back.

This appears to be an updated version of the information given out by Penske at the launch press conference, but of course no way of knowing how the journalist interpreted what Schembri actually said.

Link: http://www.thecarconnection.com/Auto_News/Daily_Auto_News/Smart_Ramping_Up_Fast.S173.A13658.html
 

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Keep in mind that some of the reservers were opportunists using family and friends to reserve a smart thinking that they would flip it. I'm sure that cancellation percentages will increase. I would guess at 12% - 15% when the smoke clears.
 

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Don't forget that the people who are confirming their orders now are the earliest adopters and are more enthusiastic about the car and are more willing to wait for it. I hope and suspect that as the confirmation e-mails roll out that more and more people back out.
 

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But at confirmation, you still are not adding any money to the pot, nor are you further committing to buying the car (are you?) So what will prevent those same early adopters from just going to the next step until there's an orphan car at their appointed dealership?
 

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But at confirmation, you still are not adding any money to the pot, nor are you further committing to buying the car (are you?) So what will prevent those same early adopters from just going to the next step until there's an orphan car at their appointed dealership?
Somewhere along the line they talked about signing at the dealer and paying a "deposit." I'm not sure how far in advance they want that. Should be a short wait for the first in line (none of us have done that yet, and we expect first deliveries in January) and they may bring in others early on to get some $$$ commitments.

They did talk about reservations cancellations at the D.C. breakfast and that they would be sold by the dealers. I'm sure all this talk is designed to increase awareness and sales. What else do car salesman do? Anything to increase traffic on the showroom floor!
 

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Hopefully the ones that go unclaimed will be offered to people further down the list rather than walk-ins or a dealer's own list, even if the price gets inflated by the dealer. So, one abandoned smart would mean two people off of the wait list. I can dream, can't I?
 

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Hopefully the ones that go unclaimed will be offered to people further down the list rather than walk-ins or a dealer's own list, even if the price gets inflated by the dealer.
Roger has made it clear, no dealer markup. But I think the most interesting thing right now is what's going to happen to those cancellation cars.

20% of 30,000 is 6000 cars or 120 per dealer. Assuming that they make 30,000 cars for the USA and 50 dealers. That's 10 additional cars per month that can be sold.

Mercedes of Beverly Hills expects 600 cars and 500 reservations. So that 100 extra cars fits with the 20% drop out rate.

If new reservations go through the roof after the first cars start appearing on the road someone is going to be smiling all the way to the bank.
 

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This has been addressed in other threads concluding that the dealer MUST offer the orphan cars to the next in reserved line at their dealer area. As we've said many times...stay in close touch with your dealer/salesman and make your needs known. I am reserved for a White Pure but will pretty much take anything that comes available short of a Cabriolet as long as it's within my price range. My salesman knows this. :D
 

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lets see...some times it amazes me the new math and how it applies

At last word Pensky said he was "trying" to increas the 16,000 alocation to 20 or 24 thousand Where do we get 30,000 2008 Smart cars coming?

At last word IB has accepted 34,000+ $99 reservations

At last word the attrition rate is 8~10%....

hmmm.. 10% of 34,000 is 3400

34,000 -3400 is 30,600 who still want one of the 24,000 2005 Smart cars... Ok..... even if 30K are coming there is still a shortage

Some how I doubt there are any extra for dealer sales outside the reservation program

Remember to subtract from the 24,000 or 30,000 all the demo cars 150~200 and the 200~300 or so going to REAL insiders... the HQs staff of IB and PAG, and thier friends and family members.
 

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Fred, where did you get the 8-10% attrition rate? Other reports have it around 20% now, and there will be more when the checkbooks need to be opened up at the dealership.

That would leave about 6800 reservations dropped out of the 34,000 (and smart keeps saying 30,000+ so the numbers get even fuzzier).

Here is one set of firmer numbers. My dealer (Beverly Hills Mercedes) told me that they are getting about 600 cars on 500 reservations, and that 2 other nearby shops are getting about the same.

I think the "sell out" is a bit of marketing hype put out by smart in DC this week. But they are pretty close, but they still talk about possible walk in sales sometime next year.

Zetsche is reported to say that if 90% of the orders go to sales, they will be sold out. http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=72193&Nid=37063&p=282517
 

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I hope it's just hype. The demand is high, but the whole idea that it is sold out through the year could be a way of getting everyone to line up. After all, if you don't get in line, you won't get one!

It works the way the console wars did. The PS3 was hyped big time. The idea that they were hard to get made everyone want one. Once the smoke cleared everyone looked around and realized the games weren't that great and there were too few of them released. The PS3 was easy to find a short while later. If you keep the hype about it being sold out up, then the media is going to give you coverage for it being sold out which means more sales.

The Wii meanwhile was relatively easy to get on launch day, because the hype wasn't as big. Once everyone realized that it was a fun system, it was near impossible to get. I want a Wii car.
 

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lets see...some times it amazes me the new math and how it applies...
I'm with you on this Fred. I like the old math. And I like analysis based on facts, and clearly stated assumptions where facts aren't available. I'm not impressed by bold assertions based on rumour and wishful thinking.

I'm aware of the following information that could be called credible (reported by several independent sources as coming directly from Penske management): 34,000 reservations (as of the official launch in Oct); 90% conversion rate of reservations to confirmations (couple of weeks after the launch); 20,000 units to be shipped to the US in 2008 (from May).

If they expect to sell out in 2008 (no unsatisfied reservation holders, no surplus cars for sale to walk-ins), the conversion rate of confirmations to sales would have to run around 65%. If they expect a 20% surplus in 2008 (no unsatisfied reservation holders, 4,000 cars available to walk-ins), that conversion rate would have to run 52%. This assuming that PAG sticks to the promise of satisfying reservation holders before offering cars to the general public.

So, will one person in three who confirmed bail when the dealer calls? Seems high to me, but who knows. One person in two? Find that hard to believe.

If anyone's got different numbers, bring 'em on. But make it something better than "the guy at the road show/1-800 number/dealership heard yada yada yada..."
 

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Based on Zetsche's comments this week in DC on reservations of 30,000 that they would sell out if 90% of those convert. That's 27,000 sales. http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=72193&Nid=37063&p=282517

It appears that the number of shipped cars has increased to 27,000 in 2008.

I think the source is solid and the information current.

Big question still remains, what is the true dropout rate?

Marketing Daily mediapost.com 12/06/2007 said:
Zetsche said the company, which has received 30,000 orders for the Smart ForTwo vehicle, is essentially sold out if 90% of the deposits realize sales.

..."There will be cars available for test drive and in some cases for purchase, but for the most part, we will be fulfilling reservation orders; so it won't be like a Toyota, Ford or GM dealership." (Ken Kettenbeil, director of communications for the Michigan-based Smart USA)
 

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This is exactly what I'm talking about. When infering facts from media reports, you always want to compare several sources.

The press report you cite is from Zetsche's news briefing in Washington. There are a large number of press reports from that meeting, and most of them quote Zetsche directly, rather than paraphrasing him as mediapost did:

Smart, which reaches U.S. dealerships in January, has received $99 deposits from more than 30,000 customers to reserve the two-seater and about 9 in 10 are placing full orders, said Daimler AG Chief Executive Dieter Zetsche. More than 50,000 motorists have taken the tiny vehicle for a test drive at road shows around the country.

"We were totally amazed by the kind of reaction we got," Zetsche said at a breakfast with reporters. He declined to release the vehicle's 2008 sales projections in the U.S. but said the orders are "going far beyond the production capacity we have available for next year."
http://www.foxbusiness.com/markets/...t-car-high-according-daimler-ag_389907_8.html

The majority of these reports reiterate three key points made by Zetsche:
  1. There are more than 30,000 reservations
  2. 9 out of 10 reservation holders are placing full orders
  3. Orders far exceed production capacity
Mediapost massaged these three items into a single, inaccurate soundbite. Specifically 30,000 reservations is not the same as more than 30,000 reservations, and 90% of deposits realize sales is not the same as 9 out of 10 place full orders. Most of the press reports directly quote Zetsche as saying that orders go far beyond available production capacity (my emphasis).

It is also worth noting that what Zetsche actually said is completely in line with previous statements by Penske and Schembri. Reservations were stated as reaching 30,000 several months back - are we really to believe no one else has reserved since then?

If mediapost is the only basis for your 30,000 orders / 27,000 production numbers, I'm sorry, but they're completely lacking in credibility.
 

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I don't know how binding it is but smartusa.com is still offering reservations on 2008 cars. What's the legality of offering a car that is sold out? With all the math going on can you factor in this info? Anyone? Anyone? Buehler?
 

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Spdickey.... I get the 9~10% attrition rate from Shembri, Pensky, and Zetsche's news briefings. I think fishrdnc is real close in his assumptions. That said even a attrition rate approaching 20% still leaves a lot of folks without a firm place in line for a 2008 Smart car.

I question is your assumptions.

I don't know where you saw 27,000 units for the US market.... We KNOW that originally it was 16,000...Later Pensky hinted that he was TRYING for 20~24 thousand... I missed it if he has confirmed success in that increase.

I am willing to assume he will get more production because trying to fill a demand exceeding 34,000* with only 16,000 units would be a disaster. But I seriously doubt he is sucessful in nearly doubling the original contract allocation. (somewhere it is posted that "All reservations will be fulfilled")

*(a published number by PAG or IB I forget)

I think it safe to assume there are ZERO extra units...

I think your dealer, with his 600 unit prediction against 500 confirmations, is wishful thinking

Pls Cite you source for 27,000 or 30,000 units earmarked for the USA market...

I bet you find 30,000 is the combined total of Canada and USA for the North America 451 models planned for 2008...
 
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