Blog: Is Smart toast?
Dave Leggett | 24 March 2005
How grim is the situation for DaimlerChrysler’s Smart brand? Well, Goldman Sachs estimates per unit losses on Smart cars at €5,000 in 2004. That hurts the bottom line in a big way. Could it really be axed? My gut feeling – it could well go, but it won’t be a politically easy decision. Some people in DC are going to lose a lot of face if that is the eventual preferred choice. Maybe slimming it down for now and hoping that the next wave of models will do the trick is more likely.
But it is not a happy picture, for sure. There are three model lines now and none of them are unreserved successes or suitable for sales globally. Fortwo? It cost a packet to develop and was the brand’s pioneering model. Sales must have disappointed DC executives, for all the talk of building a brand for the long-term. For short urban journeys I can just about see it. But as a design concept it is maybe too uncompromising in some ways (like the short wheelbase – what it is all about I know!) – you’d be screaming to be let out over a long distance and some urban journeys are not short and involve highways. From the outset, I always said it ‘looked silly’. Radical and eye-catching perhaps, but not in a good way. Sorry if that makes me an automotive design philistine of some sort.
Forfour? Overpriced for what it is and how can you charge a brand premium on something that simply says ‘smart’ and comes out of the same factory where the Mitsubishi Colt is made? (The company is now cutting prices in Germany.) Perversely, maybe the Forfour is actually not radical enough as a design…remember, you are looking – under this new-in-segment brand - for conquest sales from well-heeled forward-thinking creative types who are, presumably, looking for something new and different.
The diminutive roadster/coupe? May be fun, but it is always going to be something of a curio with its small engine and dimensions (would people in the US feel happy in a go-kart mixing it with Class 8 trucks?). A toy. Nice toy, but a toy car nevertheless. Like Kei class cars outside of Japan, in fact. Fishes out of water simply in terms of lacking physical presence on the road.
What does the Smart brand say to the market? Where’s the basic hook? Just ask the people around you what they think. The image is not very clear and the product offerings don’t look very coherent in terms of creating a singular global brand identity from scratch (what you need to start with, I think). Wait a minute. Small car premium brand, from scratch? Compare and contrast with BMW’s Mini experience.
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