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SMARTs in America -- Big Deal?

ZAP, a niche motor vehicle company which made its mark building electric cars (hence its name -- Zero Air Pollution), announced this week that it had received final approval from the US Department of Transportation to start selling an Americanized version of the SMART "FourTwo" micro-coupe ("Americanized" means adding structural supports to meet safety standards and confirming that the emissions meet EPA regulations). ZAP claims to have pulled in over $750 million in pre-orders for the FourTwo. Sales are now contingent upon ZAP being able to set up a shipping and sales network to support that kind of demand. If all goes well, Americans will soon start seeing these two-seat cars zipping around their streets and highways.

So what?

The SMART is a Daimler-Chrysler vehicle, designed in cooperation with Swatch, widely used in Europe; I saw tons of them all around London. The most common model is the FourTwo, and it's much smaller than one would normally see on US roads, although the interior is relatively spacious. It's not a hybrid or an otherwise advanced technology vehicle, it's just small -- but as a result, it's fairly inexpensive and gets good mileage. In Europe, it's generally sold as a diesel, but the US version appears to use gasoline, so the mileage will undoubtedly be lower.

Anyone who has spent time in European cities will understand why small cars like the SMART would be so popular. It's not just the high fuel prices, although that's certainly contributory; in many European cities, roads are narrow and off-street parking is hard to come by. Smaller cars are simply much more practical than the larger cars more common in the US. If the ZAP version of the SMART takes off in the US, it will almost certainly initially do so in those areas which most closely match European urban conditions, such as San Francisco and New York.

If SMARTs succeed outside of dense urban enclaves, it will most likely be due to low cost and relatively high mileage (along with a bit of stylistic funk). Buying a SMART as a commute vehicle, with the truck or SUV relegated to occasional utility trips, would no doubt be triggered by a need to spend less on gas; historically, high fuel prices have always pushed consumers towards higher-mileage vehicles. But the lack of real storage in a SMART may force an interesting shift in perspective. Utility vehicles are great for carrying a lot of stuff -- but we're in an era when much of our stuff can be carted around in digital form. The coming revolution in fabbing will only accelerate that trend, especially as they adopt build-for-disassembly techniques allowing material reuse. Success of the SMART in the US may be an indicator of evolution in how we think of our material environment.

It remains to be seen whether ZAP will be able to put the pieces together to bring the SMART FourTwo to the US. They still have one more significant regulatory hurdle -- the EPA permission only applies to 45 states. ZAP will also have to qualify in California, with its stricter rules (the four states using California standards -- including New York -- would then be included). If ZAP can work that out, and figure out how to ship, sell and service the SMARTs in the US, we may get to see if we have a paradigm shift on our hands.


Listed below are links to weblogs that reference SMARTs in America -- Big Deal?:

» SMART Cars in the USA from On Safari with El Jorgito
TITLE: SMART Cars in the USA URL: http://georgeconard.com/blog/archive/2005/04/22/577.aspx IP: BLOG NAME: On Safari with El Jorgito DATE: 04/22/2005 03:07:34 AM [Read More]

» Diminutive: from daleynews
If you've ever seen those ZAP cars zipping around cities in Europe and wondered why we didn't have them here, wonder no more - here they come. It looks like a great way to get around the city; much... [Read More]

» Moolaadé from cfarivar.org
So, in lieu of doing the tons of work that I have to do in the next two weeks (two radio documentaries, and to finish my book chapter/proposal) -- I went with Sarmad, Robert Tuttle and his wife to explore... [Read More]

» They're Cute, But Will They Sell? from Carpundit
The Smart car may be coming to America after all, a decade after Swatch introduced the little thing, or a precursor, in Europe. [Read More]

Comments (11)

I'd love to drive a Smart Roadster ... it would be cool to find something fun and ... smart?

SMART cars are good, but I'd rather that SUV buyers started buying sedans rather than sedan buyers started buying SMART cars (IIRC, they are not that cheap, and a much roomier Prius gets equivalent or better real-world mileage with Toyota reliability and resale value -- and there are many small, non-hybrid cars that are cheaper and more practical than the SMART car; we only have to look to the Japanese and European markets (Toyota Yaritz, Mazda 2, Nissan Demio, etc)).

It would make more of a difference as far as oil comsumption to lose the SUVs, but also in safety and stress levels on the roads (blinding headlights coming from behind, no visibility in front, fear of getting crushed by something twice the size of your vehicle, etc).

Once sedans are popular again, it will be easier to downsize and hybridize them. But right now, many people are afraid of buying a small car (including the SMART) because of the arms race on the roads of the U.S.

Sorry for the partially off-topic confused rambling. Heh.

Erik Ehlert:

I already saw a SMART car in a parking lot here in Denver. How did it get here? Was it imported?

Jamais Cascio:

Imported or brought in by a driver from Canada.

Unfortunately, Smart cars have been a big money-loser for Daimler (we're talking 600 million Euros a year). See the Financial Times article:


relevant quotes:
"Analysts estimate that the brand has lost at least €2.5bn since its launch in 1998 and the losses will continue for the next two years."

"When Smart was launched in 1998, shortly after Daimler bought out its joint venture partner, the watchmaker Swatch, its models were sold through a different dealership network than its Mercedes models. Daimler executives scared to damage their flagship brand instead made it difficult for the brand to sell the volumes it needed to justify investments."

" Daimler executives were coy about the breakdown, but analysts estimate that almost all of the €1bn in cash charge will be paid to outside dealers and suppliers of the two models that are being cut.
This is because Daimler gave them large volume guarantees for Smart and in return kept its development costs low, analysts say. While this limited up-front investments, when a product is killed off it is hugely expensive to buy out dealers and suppliers for products that will no longer be produced.
This in turn leads some analysts to question how deep the restructuring goes, despite a headcount reduction of one-third. "This looks like just a partial restructuring. And to spend €1bn in cash on that indicates just how huge the cost would be in the case of a full closure," says Mr Jonas.
Closure of the brand had been the desired option of many analysts and investors, but Daimler executives hinted that could have cost many billions of euros more."


If the Smart were to be supplied running on LPG then it really would be smart.

Mark Fox:

I await the arrival of the Smart in the USA. Daimler-Chrysler now projects a 2007 corporate introduction. Most of Daimler's financial problems of late have little to do with the launch of the Smart car.

It is well reported that Daimler got 'took' when it purchased Chrysler. Accounting tricks were used by Chrysler to boost the buyout price of the company. Also, the Mercedes brand has had a number of quality issues that have cut into their total ‘all brands’ sales figures. Smart is still a relative new brand on the market. Take GM's Saturn brand, it has taken ten years for this division to show any profit and it was getting dealers sticker price for the cars for most of that period.

Yes, there is a hormonal imbalance for a lot people in the US who want big cars/SUV/Trucks, etc. But you know what, a lot of people long for a small, economical car to own and operate. I see the Smart falling into the original Mini and Beetle niche. Funny looking by some people’s standards, the car is cute and fun to own.

In Canada Daimler Marketing initially proposed the importation of 1100 cars, but then dropped the actual number to 800 because they did not know if they would sell. Guess what, there were 3,000 order for the cars before the first Smart car rolled on to the dock in Nova Scotia. So, over double the marketing departments original estimate is pre-ordered for next model year’s shipments. How many car companies can recently post that claim to fame

Smart owners joining or form owners clubs in almost every country that the Smart sells. After market parts companies are popping up in those same countries to supply the personalizing appetite of the owners.

As for safety, tests have shown the design to be very safe for the occupants. The cost to repair minor accidents has been in the low range of all cars on the market today. In Canada one person took his new Smart onto a frozen lake to see how skid proof it really was. He was unable to make the car spin, thanks to traction control, etc.

Will it sell big in the USA, don’t know, but do predict that it will have a large cult-culture-following develop around it.

Good Motoring

Just to add the perspective of a UK smart driver, I had a fourtwo for two years and now have a roadster - ok, I had three original minis and Honda Beat before that so I guess small cars are more my scene - but I'd have no problem recommending them. It would comfortably sit at 80mph on the motorway or zip around town all day and still never drop below the sort of economy you get from a £20k hybrid. And you wouldn't believe the stuff I crammed in it. Plus it's more like playstation than driving, especially with 6 clutchless gears and paddle shift.

It always felt safe to me, although I'm not sure how I'd feel sitting next to a chevy smackdown or Ford excommunicator!

I loved my little smart. But the roadster, mmm - now I really have a smug grin on my face...

I'm glad the US is getting the Smart, DCX weren't going to sell them in the UK until they realised so many were being imported, so I hope they wake up to the same thing happening in the states.


"It is well reported that Daimler got 'took' when it purchased Chrysler. Accounting tricks were used by Chrysler to boost the buyout price of the company. Also, the Mercedes brand has had a number of quality issues that have cut into their total ‘all brands’ sales figures. Smart is still a relative new brand on the market. Take GM's Saturn brand, it has taken ten years for this division to show any profit and it was getting dealers sticker price for the cars for most of that period."

I gotta say, this is just inaccurate. Take it from an insider, there was no "getting taken" involved, did DBAG overpay for Chrysler, certainly , but that was the nature of the times. Did ALL of the synergies pay off in the time period that they were suppossed to, nope, but nearly 4B$ did in five years, 1.8B coming in year one. About cross cultural integration and communication, those were hard points, but the story continues to blosom.

Smart continues to sell well in europe, albeit at 10-20% less than expected or required sales, but this year has seen the greatest uptick. As well, manufacturing costs were higher than expected (this is all well reported in company filings) and margins lower. I still don't know why a US version is so damb delayed, it should have been here four years ago.

I would think that the Smart Car should breeze through the California emissions laws. Think about it. The car is so efficient at burning fuel that emissions should be very, very low.

As for shipping the small size is another bonus since on the ship you can pack twice as many of these cars in the same amount of space (wonder if they charge per car or by size/weight?)

I drive a small SUV now but I miss my days of driving my little Geo Metro XFi where I got an average of 50mpg. Good gearing gave it plenty of low-end torque and it was a joy to park when everyone else was driving around trying to find a space big enough for their cars.

And the great thing about small cars like this is that it might even be greener than a hybrid. You probably get better highway mileage than a hybrid and there's no big storage battery full of nasty chemicals to deal with when it comes time to change that out. With the money saved over the expensive cost of the hybrid itself you could drive forever in a Smart Car using that money to buy gas.


I have to apologize for being a little smarta** here, but the car is called smart fortwo not fourtwo fitting just two people as opposed to their forfour available in Europe which fits four people ;-)


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