Europe’s popular but money-losing Smart Car is heading to the United States, where promoters hope it will follow in the tracks of the Mini Cooper and Toyota Prius and become the next automotive fad.
The Smart Car is a small two-person vehicle that has been cruising highways across Europe and Asia for seven years. In April Zap, a Santa Rosa, California, maker of batteries and electric cars, announced that it received approval from the U.S. Department of Transportation to begin importing the vehicles.
Zap is hoping to copy the recent success of the trendy Mini Cooper and gas-sipping Toyota Prius hybrid with American car buyers. “People look at small cars as smart and fun,” said Zap spokesman Alex Campbell.
Karl Brauer, editor in chief of automotive website Edmunds.com, isn’t sure the Smart Car will have the cool or cute factors that have made the Mini Cooper a success. “Some people want a car that will make people stop and look,” Brauer said, but that is a minority of drivers. He said many people would be fearful of “driving around in a tin can that looks like it could get squashed by an SUV.”
The Zap is 8 feet 2 inches long, or slightly more than half the length of the Prius, and at 1,588 pounds it is nearly 40 percent lighter than the Mini Cooper. Campbell said the three-cylinder car appeals to urban dwellers who need to squeeze into small parking spaces and like the stylish colors.
The customizable car will be sold with door panels in a variety of colors that can be switched “within the time it takes to drink a latte,” Campbell said.
The European version of the car, which is manufactured by Smart, a subsidiary of Mercedes Benz, is rated to get 60 miles per gallon. However, Campbell said that after being modified by G&K Automotive Conversions to meet the tougher U.S. emissions standards, the car received an initial Environmental Protection Agency rating of just 37 mpg. He said the company’s internal tests indicate that the modified car should get at least 50 mpg, so it has asked the EPA for a retest.
In its current form the Smart Car could be sold in 45 states, but not in California and four others that adhere to the nation’s toughest emissions standards.
Campbell said despite recent questions about the car’s fuel efficiency, dealer and consumer interest has not waned. Even if the Smart Car can’t compete with hybrids such as the Prius or Honda, Campbell says the car will still find an audience. He said dealers have already signed purchase orders for $750 million worth of the vehicles, which will be priced from $15,000 to $25,000, depending on options.
The Smart Car may get the attention necessary to build a new brand, but it’s likely to find a niche market at best, according to Brauer. “They are never going to sell 50,000 cars in a year (in the United States),” Brauer said.
Zap will have competition from the car’s manufacturer when Mercedes-Benz’ Smart USA begins selling the cars in 2007. The Smart Car has been an albatross for Mercedes, selling well but always losing money for the company, according to Brauer. Mercedes sold 35,200 Smart Cars in the first quarter of 2005, an increase of 44 percent, but lost more than $5,000 on each vehicle, according to Reuters.
In April Mercedes-Benz took a $2.5 billion write-off, restructured its Smart division in an effort to make the division profitable by 2007, and canceled plans for the Formore SUV, a larger version of the Smart Car.
“MBUSA plans to evaluate the potential for this vehicle in the U.S. market based on the tremendous response to the Smart brand here,” said Donna Boland, manager of corporate communications for Mercedes, in an e-mail.
Brauer said having another company market its vehicle first could prove advantageous. “Mercedes will find out how much interest there is without them spending the money,” Brauer said. He said Mercedes-Benz’ Gelaendewagen was similarly sold in the United States by a third party before the company’s version.
Zap’s Campbell hopes the Smart Car’s success will propel Zap into becoming a major automobile manufacturer. He said the company has 100 cars ready for the American market and is working with dealers to establish delivery schedules. “If we can create a California car company, it would be great for consumers and the world,” Campbell said. “It would be nice to have a choice of more than three (U.S.) car companies.”
by John Gartner