How the Smart Car Works

Gauging the potential market success of Smart Fortwos in the U.S. market is difficult. Even in Europe, where parking and petrol (or gasoline) come at a premium, initial sales were slow, but eventually the Smart brand became a success. More than 750,000 Fortwos have sold in Europe, Japan] and other countries.

The U.S. market has not been overly friendly to ultra-efficient vehicles in recent years, but that has been slowly changing as gas prices have increased. Waiting lists for Prius models and the success of Toyota's Scion line suggest that American drivers are ready for small, efficient and distinctive cars. Previous subcompacts have carried fuel economy over into design economy, resulting in drab, generic cars. The Smart is likely to have greater success in Canada, where sales of the Toyota Echo far exceeded U.S. sales figures.

While the Smart's flashy but diminutive image might work in its favor, many American drivers like their vehicles big. Pickup trucks are top sellers nationwide, and SUVs and Hummers are the top luxury vehicles. To increase the car's profile among American consumers, Smart has paid to have Fortwos present at several major events, including the New York and Boston Marathons [ref]. The main characters in "The Da Vinci Code" used a Smart Car extensively, and it had a starring role in the film's trailer as well.

The biggest drawback for Smart dealers is its price. Depending on the version and features included, the price for a U.S.-modified Fortwo currently ranges from $25,500 to $35,500 [ref]. Buyers seeking fuel efficiency are often also seeking bank account efficiency, and they can find a small car with decent mileage for several thousand dollars less than the cost of a Fortwo.

There are already some Smart Cars available for sale in the United States. Independent importers brought them in on the gray market (they bought the cars and shipped them into the United States for resale). The practice isn't illegal in most countries, but it isn't approved by the car's manufacturer either. DaimlerChrysler will introduce the car officially in 2008, with the next generation Fortwos selling through the UnitedAuto Group of dealerships. Dealership rollouts and brand marketing should begin as early as mid-2007 [ref].

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