BARCELONA - Micro Compact Car expects to see Smart cars spread over Europe as if from a spring bubbling up through the Alps.
Germany, Italy and France will have 75 percent of Smart sales in 1998, says Hans Jurg Schar, MCC board member responsible for marketing and sales. Switzerland is the home of SMH, the Swatch-making partner of Germany's Daimler-Benz. The factory is in France. And Italy likes small, fashionable cars.
The Smart CityCoupe will be launched in October in nine markets. Germany, France and Italy will each account for 5,000 to 6,000 units of the 20,000 to be sold this year. The remaining 3,000 to 5,000 units will be sold in Austria, Spain, Switzerland, Netherlands, Belgium and Luxembourg.
By 2001, the car will be in 12 to 14 markets, said Schar, and Germany-France-Italy should have 60 to 65 percent of the total sales of 200,000.
These figures do not include a right-hand-drive version or sales in the UK and Ireland. Schar said MCC has not decided yet on offering a right-hand-drive, but another company insider said development was proceeding toward a launch in October 2000.
After the original nine countries, MCC will be introduced in Portugal and Greece, said Schar. The next possibilities, he said, are the Scandinavian countries and maybe some east European countries.
Micro Compact Car plans to have 110 dealers in the nine original countries, of which 88 will be open by October. Distribution is organized in four types of dealerships, which are related to the volumes planned for the assigned zone.
In addition to the Smart center, a dealer could have one or more satellites in city centers or big shopping malls.
Micro Compact Car has several strategies for covering large cities with different commercial zones. Berlin, divided into three zones, has three different Smart centers owned by the same person. The opposite is true for Milan, where the three zones are covered by three different people. Paris is a mix: five zones covered by two persons.
On average, half of Smart dealers are also Mercedes-Benz dealers, a quarter sell other cars and a quarter come from other retail businesses. The percentages vary by country. All 22 Smart centers in Italy are automotive dealers, and 20 are from Mercedes-Benz. In Holland, only half of the owners come from the automotive business and none sells Mercedes.
The dealer margin of the Smart in the first year is a fixed 16 percent for all three trim levels to be offered. Beginning next year, dealer margins will begin moving toward the Mercedes-Benz policy, in which about three-quarters of the total margin is fixed and the remainder is related to sales targets and customer satisfaction scores.
Smart dealers will pay for cars upon receiving them. Supplies from the factory will arrive weekly. Micro Compact Car wants to deliver cars within two weeks of the customer's order.
Fleets smaller than 50 units a year will be sold through dealers. Larger fleets will be discussed and finalized with the mother company. Smart expects to sell about 10 percent of its volume to fleets.
Dealers expect to accept a used car in trade on three cars, but it will vary by market. Dealers will give a one-year warranty on the used Smarts and traded-in cars less than six years old that they sell.
Traded-in cars older than six years or those worth more than DM20,000 ($11,200) will be sold to other car dealers or to used-car superstores.
Dealers will sell services too. Financing and leasing will be offered in cooperation with local subsidiaries of Debis, the Daimler-Benz financial arm.
The same will happen for insurance, in partnership with the local representative of the Zurich Ins-urance Group of Switzerland.
Advertising and marketing will be centralized. All advertising will be pan-European, decided and created by the parent company. The same will happen for marketing. Any new services for customers are to be organized with a single partner with representatives across Europe.
The MCC office in each country is expected to be extremely lean, with only six to eight people.
The local top executive is called the regional manager.
A coordinator oversees the local market. If the market is big enough to subdivide, district managers will report to the coordinator. One service manager covers the service for the entire country.
A business manager follows budget items. A PR manager will handle publicity.
The communication manager is responsible for local advertising and adapting pan-European campaigns to the market.