Smart sells out in Canada

Smart sells out in Canada

No sizzle needed for Smart car, Mercedes says models sold out, Some deliveries will take months' says Toronto Star.

TONY VAN ALPHEN
BUSINESS REPORTER

Auto makers usually spare no expense when it comes to launching a new model or brand. They want buzz.

But it has been different at Mercedes-Benz Canada and its very different auto - the tiny Smart car - this fall. Mercedes and Smart staff have left the marketing machine in the garage.

There has been no big advertising push. No television spots in prime time or full page ads in newspapers. Why? It's because the Smart car, the smallest car in Canadian history, is already sold out. Mercedes-Benz said yesterday there was no point in a national marketing campaign and other major promotions when many customers have to wait several months for delivery.

"We've postponed it," said JoAnne Caza, spokesperson for Mercedes-Benz. "We don't want to leave customers believing they can come into a showroom tomorrow and then drive away in a new Smart car in a few days.

"In some cases, to be very honest, some people will have to wait until the end of March. Right now, there are no cars in stock. Other than pre-sold cars, the only thing we have are demonstrators."

The Smart Fortwo coupe is only 2.5 metres long, or about 8 feet, and two of them can fit in a garage or regular parking space. The car contains an 800cc three-cylinder diesel engine. It can hit speeds of 135 km/h and consumes 4.7 litres per 100 kilometres in city driving and 3.6 litres per 100 km on highways.

The manufacturer's suggested retail price ranges from about $16,500 for the base model to $19,200 for a loaded version. The price for the Cabriolet model ranges between $19,500 and $22,500.

Other companies have faced the problem of running launch campaigns when it became clear early that production could not keep pace with demand. Volkswagen's Beetle, Toyota's Matrix and DaimlerChrysler's PT Cruiser ran into such problems in recent years.

Mercedes-Benz's Smart assembly plant initially allocated 800 vehicles for Canada from its plant in France for the fourth quarter of this year. But the orders with deposits started coming in February when Mercedes announced the Smart car would arrive in showrooms in October.

When orders quickly exceeded supply, Mercedes gained a further 200 from the factory. That didn't come close to satisfying demand and the waiting times grew longer.

Mercedes won't disclose how many shoppers have ordered the cars to date.

The company here doesn't know how many Smart cars will be coming from the factory next year. Canada is among 33 other countries where the Smart is sold and worldwide demand is growing.

Global sales have climbed from 80,000 in 1999 to more than 124,000 last year.

"We are talking to the factory on a daily basis to get added production for 2005 to reduce the waiting period," Caza said.

Chris Travel, who specializes in auto research as vice-president of Maritz Research, said the Mercedes plant in France has orders and different model specifications from numerous other countries, and that can play havoc with allocation and marketing here.

Travel said one of the advantages of short supply is it continues a market buzz about a car that is not readily available.

"There is also a school of thought that by limiting the supply of a product, it increases the desirability," he said.

Travel said BMW didn't have to spend much to market the Mini brand in its first year because models flew off dealer lots.

Since then, Mini's marketing has kicked in to keep sales humming.