UK: Smart changes business plan
Coinciding with the launch of the new Smart ForFour Brabus, the DaimlerChrysler owned small car company has altered its UK business plan.
After five years in the UK, Smart is broadening its model range; mainly with the ForFour, but due to demand it has secured a further supply of 400 roadster and roadster-coupe Brabus models for 2006.
Announcing the roadster/coupe's stay of execution - the line was to have been dropped completely - Jeremy Simpson, head of Smart in the UK and Northern Ireland said: "These models will have some technical and trim changes for the next year. We currently have 1,000 in stock to meet customer demand for this year when 2,500 units will be sold with the Brabus versions accounting for 15%."
Simpson added, "It is ironic that as soon as DaimlerChrysler announced production of the Smart Roadster was to stop, UK customer demand increased 30% hence our request to the manufacturer to extend the car's life for us until next year. The roadster looks as though it will become a future classic.
"The ForTwo range should see sales of 5,500 units this year with the Brabus version taking 11%. We also expect to sell 5,500 ForFour models this year with the new Brabus version accounting for 4%. The UK has been the world's number one Smart Brabus market for three years running".
UK Smart sales have grown from 956 units in 2000 to an expected 12,500 units this year. For the first six months of 2005 Smart sales were 5,489 units, an increase of 5.86% in a declining overall market.
"This year the UK market for Smart should return to being the third largest in the world behind Germany and Italy," Simpson noted.
Commenting on reports that the German distributor of Smart is predicted to give up the franchise, Simpson said he thought that if this were the case then DaimlerChrysler would take over the operation and sell the cars alongside Mercedes-Benz as it does in the UK.
He also said Smart in the UK was no longer pushing to increase sales volumes to gain a 1% market share. "We and our dealers must capitalise on the Smart premium brand qualities. UK customers pay for individuality and we have more individual models of cars to meet that need for individuality.
"We are simplifying our model line-up and simplifying the range of options we now have which customers tell us is to confusing. For instance the entry level ForFour Purestyle now has six options compared to the 57 previously available.
"We are also making it easier and less costly for dealers to acquire and operate a franchise. Our original plan was to have 106 dealers and after sales points in the UK but we have now reduced this to 73 points in place by 2007. Currently we have 56 dealers but we need to increase our representation and fill open points nationwide and we want to establish outlets in smaller towns as well."
He added: "Dealers will now need three-car showrooms or showroom space rather than the six-car requirement we had before and we are considering applications from non Mercedes-Benz franchised dealers for the first time. We are able to offer our dealers better profit margins and a more financially attractive stocking plan.
"The new business plan also allows us to have new combined Mercedes-Benz and Smart pylons outside the joint dealerships so raising our brand profile. This is rather like BMW and Mini retail operations.
"Dealers will now find it more profitable and viable to hold our franchise. There has been an explosion in the demand for our used cars, which has grown by 35%, and with 45,000 Smarts on UK roads there are big opportunities for used sales, service and repair work. We have the second largest owners club in the country with 22,000 members - behind the MG Owners Club but bigger than the Porsche Owners membership.
"We are also stopping our national television advertising campaigns and in future we will be spending our money on regional advertising and promotional events in areas where we have dealer representation.
Simpson said Smart UK had negotiated lower insurance ratings on its models. The early Smarts in the UK were left hand drive 'grey' [unofficial] imports and due to the lack of parts and body panels to support these vehicles the initial ratings were much higher than they should have been. Now with about 40,000 'official' cars on UK roads, and a proper dealer network and national parts operation to support them, insurance costs are much cheaper.
The new ForFour Brabus has the same core 1.5-litre petrol engine used in the Mitsubishi Colt CZT three-door (built in the same Dutch factory as the Smart) but the power output has been boosted from 147bhp to 177bhp giving the Smart a 0-62mph (100km/h) time of 6.9 seconds and a top speed of 137mph.
The ForFour Brabus has a stronger Getrag five-speed gearbox, tuned suspension and bigger brakes. Brabus styling changes include 17-inch alloy wheels, leather upholstery, body styling kit including a rear roof spoiler; twin sports exhaust and front fog lights.
Simpson said: "We do not see the Colt CZT as a competitor. Our car competes against the Mini Cooper S or Golf GTi but ours has better performance, better specification and a better quality interior. It is as much about exclusivity than about performance but if you compare the ForFour Brabus with the Cooper S our car, once the price adjustment for specification has been made, is 10% better value. Our car also offers more versatile and roomy rear passenger accommodation, more load area space and better practicality."