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California Autos Examiner

Wednesday, June 28, 2006

Smart Pricing




Now that smart is a lock for the US market, let's get into the details. In an interview with MSNBC, Roger Penske responded to the pricing question by saying that smart is committed to having an entry level model priced below $15,000. You can watch the video by clicking on this link. I was hoping for a sub $13,000 launch, but deep down I realized that given the high costs of manufacture and unfavorable exchange rates, it wasn't going to happen.

I think that there will be strong initial demand from customers eager for European flavor. However, what happens when that demand has been satisfied? Smart's press release mentioned that there will be three models of the fortwo. Certainly there will be the coupe and convertible, but is the third model just a trim variation? Could the rumored hybrid model be ready by 2008? The only other variation that I can think of would be production version of the crosstown concept.

The inital network of dealers will be comprised of 30 to 50 dealerships. United Auto will start evaluating interested dealerships and making arrangements over the course of the next year and half.

I respect Roger Penske and I wish him success in this endeavor. The only Penske business miscue that I can think of was Penske Auto Centers located in K-Marts. It cost Roger a pretty penny to get out of that fiasco. My only slight concern is that the smart chain will be run by Dave Schembri who was initially tapped to run smart USA along with Scott Keogh back when it was going to be distributed by Mercedes dealers. After smart bailed on the USA, Keogh moved on to focus on Mercedes (and just recently moved to Audi) while Schembri moved to Mitsubishi to head up sales and marketing. Dave's move obviously didn't work out too well and Schembri was once again on the streets. Penske quickly scooped up Dave and put him to work on the smart project. I know that folks in the business move around, but I wonder if Schembri has what it takes?

1 comment:

Bruce Whitaker said...

As far as the third trim being a possible diesel, Daimler Chrysler has already shown the prototype hybrid at this year's Michelin Challenge Bibendum. You can see MSN's streaming video interview with one of their engineers here. The engineers I talked with were pretty tight lipped about any prospects for bringing smart to market in the US before the official announcement. They were, however, pretty excited about having both working gasoline and diesel hybrid configurations already running. The prototype didn't have a devoted start-stop mechanism, having to rely on the car's own built-in engine starter when switching between diesel and electric modes. The electric motor, battery, and control components all fit neatly onto the bottom of a production fortwo. Obviously, no one was willing to give definite word on future plans, but having driven the diesel hybrid version, and seeing how advanced the system is, it would make sense to market a hybrid version as the ultimate fuel economy commuter vehicle, if only for the PR value.