Daimler Pitches Smart Brand, Although It's Nearly Sold Out

As Congress closed in on a bill to raise CAFE standards this week, Daimler AG CEO Dieter Zetsche was in Washington, D.C., to pitch to government and business brass the company's Smart brand, which launches next month the U.S. as Smart USA, a subsidiary of Penkse Automotive Group.

The company began a program this summer allowing Americans to reserve a car with a refundable $99 deposit. Zetsche said the company, which has received 30,000 orders for the Smart ForTwo vehicle, is essentially sold out if 90% of the deposits realize sales.

The company says it has sold 850,000 units in Europe, and has been test driven by 50,000 Americans.

Ken Kettenbeil, director of communications for the Michigan-based Smart USA--which is the sole distributor in the U.S. for Smart and will be responsible for setting up dealerships--says the goal is 74 dealerships by year-end 2008.

Penske Auto will own eight of them. "There will be cars available for test drive and in some cases for purchase, but for the most part, we will be fulfilling reservation orders; so it won't be like a Toyota, Ford or GM dealership."



He says the company expects the majority of dealerships--about 57--will open in January, and that all 74 will be in major metropolitan areas, ranging from Chicago and New York to Omaha, Neb. and Jackson, Miss. Smart, which has no ad agency, will support with local marketing tactics, including advertising and grassroots efforts, per Kettenbeil.

Wes Brown, automotive consultant with L.A.-based IceOlogy, says that broadly speaking, the Smart Car buyer will look an awful lot like people who buy hybrids.

"I would say that the initial set of buyers is going to be a combination of two types: those who look at the vehicle as a way to be 'Smart' toward the environment and fuel economy, and the second, whom I believe will also initially be the more prominent buyers: those who see it as a fashion statement, as a cool-looking, fun vehicle." Brown says they will be well-educated and affluent.

"If you were to look at it numerically, they will be similar to hybrid buyers--maybe a little younger."

Consumer and media research firm Scarborough Research says people who buy hybrids are indeed--and this may not be terribly surprising--Democratic, wealthy, educated and active.

Per Scarborough, about half of the households in the U.S. that own or lease at least one hybrid vehicle have an annual income of $100,000 or more, or twice the national average. Adults in hybrid-owning households are more than twice as likely as the hoi polloi to have a college degree. Per Scarborough, 27% of hybrid owners also have a post-baccalaureate degree, versus 9% of the population at large. They are also 23% more likely than average to be over 50.

Of 982 respondents, 67% of hybrid owners own a Toyota, versus 16% nationally--which means hybrid owners are more than four times more likely to own a Toyota, per the group.

The firm finds that 38% of "hybridites" name Democrat as their political party affiliation. They are also fit. Thirty-three percent of hybrid owners, per Scarborough, belong to a health/exercise club--as opposed to 18% of the total population. They are also 66% more likely than the national average to have gone biking during the past year, and more than twice as likely to have done yoga or Pilates. They are more than twice as likely as all adults to have gone hiking/backpacking during the past year. Other interests: gardening, snow skiing and golfing. Hybrid owners are more than twice as likely to have bought organic foods for their household during the past month.

Tucson, Ariz., San Francisco, Washington D.C., and Las Vegas are top hybrid markets, per the firm. Near or slightly above 2% of households in these markets own a hybrid vehicle, as compared to less than 1% of households nationwide.

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