• by Karl Greenberg , December 1, 2008

The ultra-diminutive Smart car still draws stares, but it isn't as rare a bird as it used to be. The Smart ForTwo car has been on sale in the U.S. for 10 months now under the aegis of Smart U.S.A. Distributor, LLC, a division of Bloomfield Hills, Mich.-based Penske Automotive Group, Inc. 

At the L.A. Auto Show, Smart's U.S. marketing chief Dave Schembri, a former marketer at Mercedes-Benz (which, like Smart, is owned by German company Daimler AG), said the U.S. is now the third-highest sales market for the 10-year-old ForTwo, behind Germany and Italy.

The company reports that since it began selling them in February, it has sold over 20,000 ForTwos through October.

Smart has eschewed advertising, relying instead on grassroots efforts, word-of-mouth and PR events such as a press junket that took a pair of the vehicles the length of Route 66 with Mercedes' BlueTec diesel sedans to tout the fuel efficiency and comfort of both vehicles.

And the company still funnels prospects for the $11,990-$16,990 cars to a Web site launched last year, where consumers can reserve a car for $99.

Smart communications director Ken Kettenbeil says the company now has 73 "Smart Center" retail outlets in 35 states, in major urban markets and also in places like Omaha, Neb. and Jackson, Miss.

He says about two-thirds are partnered with Mercedes-Benz dealers, either with Smart getting a separate showroom or a separate space within, with a shared service bay.

"We have always said our demographics are based on attitude and lifestyle, not income," he says, adding that the company is aiming to appeal to four demographic targets: baby boomers wanting a second or third car; empty nesters; people in large urban areas, "whose age could range from 18 to 80," and first-time buyers.

"We are seeing a pretty even split across these groups in terms of who is buying the vehicles," says Kettenbeil. Going forward, Smart will adhere to a no-advertising policy, focusing instead on online reservations, social networking, and discovery marketing, such as last year's 50-city road show. Next year, Smart will engage dealers to run promotions, and will begin to do owner events.

"We have engaged our current customers already," he says. "We place in each vehicle 25 courtesy cards that they can hand out to people interested in the brand because we were getting calls from dealers and customers who didn't have time to talk to people at, say Starbucks, about the car. We thought we could capitalize on that."

The car is selling strongly in New York, Los Angeles, the Pacific Northwest, South Florida and even Texas, as well as in large Midwestern cities.