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Hello Smart Members,

My General Manger here at Germain Mercedes of Easton and Smart Center in Columbus, Ohio attended the National Smart dealer meeting in Hoboken, New Jersey last week. Some of you may or may not know, but July 1st Mercedes-Benz will assume operational control of smart USA. Since the launch of smart in the U.S., the franchise had been directed by Roger Penske and his group. The franchise began with a torrid start with a year-long waiting list and the timing was impeccable. Gas prices went to $4 a gallon and our Smart franchise was selling as many as 40 a month.

MBUSA is planning to produce 60% more smart cars than was planned in the last 6 months of 2011. Obviously, building that many more cars without a strategy to retail them would be a disaster. Their plan begins with having a better way to manage the inventory (parts and new inventory). July 1st, the inventory and parts will move to Netstar. There will be much more emphasis on CSI (sales and service) with smart. That will begin with us providing smart loaner vehicles to smart clients.

The biggest gap and reason we have not been able to compete with those products are due to not having a competitive pricing strategy. Beginning in July, smart will unveil their very aggressive lease strategy. A current lease on a smart Passion is $310 a month and $387 a month for a Cabrio. Buyers that are payment sensitive will shy away from these offers. To combat this, July 1st, a Passion will lease for $199 a month + tax for 24 months with only $1400 due at signing. The Cabrio will be $249 a month. Those are not profitable for MB with what they set the residuals, but it will definitely get plenty of brand awareness. They currently penetrate the leasing market at 5%, this will bring the lease penetration to 40%. They are also going to offer a 1.9% offer for up to 60 months to get finance penetration to 20%. They are also going to lower the acquisition fee hundreds of dollars to be more competitive. That is how we grow the business 60% the rest of the year. Very exciting. Along with the customer leases, they will unveil a DEPP employee purchase program and it will be added to the fleet incentive program that already includes MB passenger cars and light trucks as well as Sprinter.

They are going to get heavily into social media and well as develop apps similar to the CLS and SLK apps now available on iPhone and iPad. They will focus on events with test drives and direct mail. They are going to introduce a new color, Matte Dark Gray Metallic and it looks amazing. There will be optional LED lights, 15” standard wheels on the Passion as well as an optional comfort package. They said when the 2012 models are introduced, the warranty will extend to 3 years.

The future is very bright with smart. The next generation smart car will designed to go head to head with the Nissan Leaf, which is way out in front with technology for electric cars. The battery life will increase from 4 hours to 10 hours in 2015. The 0-60 time will go from 27 seconds to 12.7 seconds. The range will increase from 63 miles to 70+, etc. We will also see a new double clutch transmission in 2015. The smart product is going to be a critical piece of MB’s business plan as every automaker must meet CAFÉ (Corporate Average Fuel Economy) standards by 2016. What that means is that each automaker must have an average fuel economy rating of 34.1 MPG. That means for every high horsepower, AMG vehicle we sell- we need something with phenomenal fuel economy to balance it out. Eventually there will be additional models added to the lineup, but that will not be anytime soon.

Thanks,

Eric

Eric Gray
Brand Specialist
Smart Center Easton
614-383-4914 Direct
866-488-1389 Toll Free
614-750-5011 eFax
www.germain.com
[email protected]

HOURS: MON-THURS 10-7 FRI-SAT 10-6 SUN closed

 

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Transition (smartUSA: PAG>M-B USA) - Smart Car of America Forums : Smart Car Forum

Some good tidbits in there: longer warranty, better lease terms, another new color. Not sure about social media as PAG tried that without much impact on sales. The actual production smart ED you describe sounds like what electric car folks will be interested in; the electric car naysayers won't be impressed. The new transmission in 2015 will certainly help if it's in a car that returns at least 50 mpg IMHO. smart needs to be aiming for that if not something higher to counter all the low mpg Mercedes products. Encouraging news - thanks for posting. :)
 

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Thanks very much for the update, Eric!

The increase to warranty coverage is encouraging, but I wonder why they wouldn't go all the way to 4 years/50K miles like Mercedes-Benz Canada did way back in 2004. Maybe the plans to make them even more affordable mitigate against that. The Canadian prices are considerably higher, though we do have $199 leases.

Here's hoping that US Mercedes dealers can ramp up sales to Canadian levels (which would be a consistent 25K cars per year, pro rata) at a minimum. Or even beat them.
 

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It makes me VERY happy to read this. I knew that with the new CAFE standards that the smart brand would be an integral part of getting there. Now I can look forward to a nice new model in my driveway in about 5 years.
 

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Thanks for the info! :)

Any word about service availability at more locations? Will all MB dealers be able/willing to provide warranty/non-warranty service? This is one of the hangups for sales, IMHO. It's one thing to drive 4 hours for a purchase (I bought two smarts at Germain, BTW), but it's another thing for a major planned/unplanned service.

 

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Discussion Starter #10
Thanks for the info! :)

Any word about service availability at more locations? Will all MB dealers be able/willing to provide warranty/non-warranty service? This is one of the hangups for sales, IMHO. It's one thing to drive 4 hours for a purchase (I bought two smarts at Germain, BTW), but it's another thing for a major planned/unplanned service.


Only if they have a Smart Certified Technician!!!


Thanks,
Eric

Eric Gray
Brand Specialist
Smart Center Easton
614-383-4914 Direct
866-488-1389 Toll Free
614-750-5011 eFax
www.germain.com
[email protected]

HOURS: MON-THURS 10-7 FRI-SAT 10-6 SUN closed

http://www.smartusa.com/index.aspx
 

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Thanks for the info! :)

Any word about service availability at more locations? Will all MB dealers be able/willing to provide warranty/non-warranty service? This is one of the hangups for sales, IMHO. It's one thing to drive 4 hours for a purchase (I bought two smarts at Germain, BTW), but it's another thing for a major planned/unplanned service.


I heard through the grape vine today that MBUSA's plan is to initially offer around 100 dealerships. This significally trumps Penske! From there they may build, depending on demand.
 

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I live in Fort Myers Florida and we have Several Germain dealerships here Honda, Toyota, Lincoln, Lexus.. Think we could get a smart dealership here considering the Germain family of dealerships have a mb dealership somewhere in the fold?
 

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So, in theory, when MB takes over in July I could possibly even go new when I trade in the Chick Magnet???
 

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Greats bits of GOOD news! Let's hope things go as planned and smart moves forward and develops a better image among average consumers.
 

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Hang onto them. The 451 cdi will be the last smart fortwo diesels.....the next generation fortwo will be gas and ED only.

I know I'm keeping both of mine!
 

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They probably won't be the last diesels. Gas and ED fortwos do indeed get better fuel economy, but in order for MB to meet (and maybe beat) CAFE standards they will NEED those cdis.

Sure, MB says no diesel for now... :wink:
 
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