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Smart car on life support

By Claes Bell, CFA · Bankrate.com
Saturday, February 19, 2011
Posted: 8 am ET

Penske Automotive Group, which owns a massive chain of auto dealerships worldwide, announced this week it was ending its relationship with Smart. Smart cars will now be sold and serviced at Mercedes Benz dealerships instead, following a brief transition.

It's not hard to see why Penske made this decision. Since being introduced to the U.S. in 2008, the Mercedes-Benz-built microcar has failed to catch on. In 2010, a survey by CNW Research showed less than 1 percent of car shoppers had the car on their list of buying prospects.

Smart cars have failed to catch on with U.S. buyers, thanks in part to their diminutive size. (Photo by Elijah van der Giessen.)

Smart cars have failed to catch on with U.S. buyers, thanks in part to their diminutive size (photo by Elijah van der Giessen)

Why have U.S. consumers rejected the Smart? According to CNW:

Our focus groups were pretty blunt about their experience with the Smart. Drive train issues -- from the use of premium fuel to the less than smooth engine-transmission operation -- noisy interior and dodgy handling at highway speeds led the list of product-related issues.

On the psychological side, many owners began feeling unsafe in the Smart even though the car has proven to be quite good for its size. Close quarters, scary Web photos of Smarts in accidents, wind buffeting when passed by oncoming trucks or large motor homes, and a feeling that the car is not sufficiently powered to avoid accidents all were voiced as concerns.

And then there is a gender thing going on. Men felt the car was too toy-like to be seen in or to use as a primary vehicle. Women thought the styling was both adorable and cute, but lacked load capacity for such things as groceries.

Young consumers (under age 25) were put off by the price and two-seat configuration, preferring lower-priced econ-boxes such as Nissan Cube, Scion xB and Kia Soul, while older consumers (60-plus) thought the value was lacking (size and price didn't "compute" according to many participants and respondents.)

I'm a certifiable cheapskate, and I never got what people saw in the Smart in the first place. In the Smart, you get a tiny interior with no trunk space or back seats and good-but-not-amazing fuel economy at a price ($11,540 for a base model on sale right now) that could buy you a Hyundai Accent or Nissan Versa with literally twice the interior volume, with more than a $1,000 left over for options or that new TV you wanted.

Sure, your fuel mileage will be better in the Smart, but any fuel cost advantage that might give you is partially negated by the Smart's premium fuel requirement. The parking thing I get, but if parking is that much of an issue where you live/work, wouldn't some combination of car sharing and public transportation be better than ownership?

What do you think? Is Penske making the right decision? Am I being unfair to Smart?

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12 Comments
Kal
March 04, 2011 at 8:33 am

There were several reasons why the Smartcar failed. One big factor was the devastating (and unfair) Consumer Reports review. CR failed to understand this was a new kind of car that should not be judged against by the criteria of other highway cruisers.

The need for premium gas was poorly explained. I'm comfortable with requiring premium gas if that means a smaller engine and lower lifetime energy consumption. Also, the car runs just fine on mid-grade.

The Smartcar is overpriced, and lacking in several features that should be standard. Smartcar STILL does not have cruise control — the main reason I did not buy a Smartcar.

Craig
February 27, 2011 at 12:19 pm

I really, really wanted to get a SMART car. I have traveled extensively in Europe and from the time I first saw one, I wanted it. Unfortunately I cannot balance the size and lack of mileage. As a teen I drove a Pinto, yep I said it, and I got better mileage than what is advertised for the Smart. More recently I owned a Chevy Sprint, which was a predecessor to the Geo Metro, It had a 3 cylinder Suzuki motor, had plenty of power, 4 doors and a hatch and got over 50 MPG on the hwy. My escort got better mileage than the SMART. So, I love everything about the Smart, BUT the average gas mileage.

Mark I
February 26, 2011 at 3:25 pm

It seems that most of these comments are based on pre-concieved notions (prejudices) or other peoples comments (heresay) and not on actual experience.

My wife fell in love with the smart car while on a trip to Italy in 2002 (her first postcard home said "I found my next car.") Ordered in May of 2007 when first offered and delivered in August 2008. For a couple (no kids) and commuting to work separately and running errands it has been great. And that is what it is designed for. Almost weekly runs to Costco and it takes all we can buy. Trips out of State and hundreds of miles on the Interstate is a breeze (although not it's forte) and it seems much larger than it is. Sure it gets blown around a bit but it never scares us. Good handling and great brakes, 36 to 38 mpg around town and 42 on the freeway, what's not to like?

On a recend trip for service to the dealer in Portland (great customer service!) I inquired about the Eibach suspension kit and the service manager said "you should try that one." As an old sports car owner for many years I understand I had a wide-eyed look on my face when I got back! We now have two smart fortwo in the driveway! The original 2008 and now a 2009 Brabus! It is amazing!

I don't believe anything that Car & Driver or Road & Track have to say about these cars as I don't think they have even tried to live with them as daily commuters. And I think they are only influenced by the advertizing $$$$ that they can get. You need to truely live with one and see that they are a true niche car and very good at that. Maybe the best thing that Mecedes makes.

Claes Bell
February 24, 2011 at 9:07 am

Vinny, Shanda, Meagan and Tom: I think you feel the way a lot of U.S. drivers do about the car, which is why it hasn't done great in the American market. Sandra, thanks for your comments. It's good to hear from an actual Smart driver and I'm glad you're pleased with the car.

Sandra Beall
February 23, 2011 at 6:29 pm

Excuse me, but I own one of these (2009) and I love it. It is not only easy to drive, but it also gets much better gas mileage than my Rodeo. In fact 8 months after I purchased my Smartie, I realized that I had not driven my Rodeo (19 mph on highway) since I got my smart car.

In fact, I have already decided to get a diesel convertable (cabriolet) when I am ready to trade it in. Also, the car only requires service once a year or 10,000 miles which ever comes first. This car handles the highway really great. I can pass other "big" cars or trucks with out any problem. It has a stablizier that keeps it steady with no problem. The only gripe I have is that the way I was treated at the Mercedes Smart Car center. I am not a ritzy Mercedes owner, but a Smart Car owner. In addition, as an "earthling", I do have a responsibility to try to lessen the footprint I leave. The Smart Car is 90% recyclable.

I would not drive any of those other so called "energy effecient" cars that the "big" car companies profess to be good.

Vinny
February 22, 2011 at 7:42 pm

Gas prices will soon reach $5.00 a gallon. The Smart Car is way overpriced when compared to 'real' small cars that get better fuel economy. It has NOTHING going for it. Now that Mercedes is selling it we can forget about 'economy'in either price or service. Time it was sent to Yugo heaven or where ever these failures go when they die.

Shanda M
February 22, 2011 at 6:14 pm

I don't know why Penske thought Americans would buy into the idea for this car in the first place. I feel a little overwhelmed by the big suvs and trucks in my small mitsubishi eclipse, so I have no idea how someone would feel in that tiny, wind-up car. Whenever I've seen one of these cars, everyone is laughing at it cause it really does look like a toy car.

Meagan
February 22, 2011 at 2:44 pm

I agree with Tom. In the EU parking is a big issue since they have lots of cobblestone streets, etc. And most people don't have to drive their groceries home in Europe nor do they even have Costco. I would never get a Smart car because I have kids, Forget putting a car seat in a teeny Smart car.

Tom
February 21, 2011 at 10:42 am

You're right, it's too expensive for its size. I can see the parking issue being a huge plus in most European countries, but here in the US this doesn't really apply anywhere. Also, inferior quality may also be a reason: I read it's impossible to change the oil of the engine and the engine will probably only last some 60,000 miles. So it's really not a good car, especially not for the price.