uca Ciferri, Dorothee Ostle & Stephane Farhi Automotive News Europe
Smart car sales have risen sharply with help from a new marketing campaign and expansion of the sales network to include Mercedes-Benz dealers.
By the end of the year, Micro Compact Car expects to have up to 1,000 Mercedes dealers selling and servicing Smarts across Europe.
The car was launched in continental Europe last October through 110 special Smart Centers. But after a trouble-filled first six months, DaimlerChrysler relaunched the Smart in April with a new pricing strategy and advertising campaign.
After taking just 6,500 customer orders in the first quarter, Micro Compact Car, the DaimlerChrysler unit that builds and sells the Smart, now reports monthly orders of more than 8,000 units. Through June, 30,000 orders had been booked.
'We are very confident of reaching 80,000 sales this year,' said Klaus Fricke, head of marketing and sales. 'Talks with some fleet customers also look very promising.'
DaimlerChrysler integrated Smart into its own national sales organizations in May. Operating like sub-dealers, Mercedes-Benz dealers can earn a commission on sales and act as a service point for the nearest Smart Center. They will not have cars on display.
'With just 110 Smart Centers, our dealer network couldn't cope with the size of their sales areas,' said Fricke. 'We had far too few outlets and service points.
'By the end of the year we will have up to 1,000 Mercedes-Benz dealers working closely with their related Smart Centers,' he said.
Mercedes dealers also can buy or lease Smarts for a favorable price and hand them out to customers for use while their car is being serviced or repaired.
'With this new sales structure Smart moves closer to the customer because distances get shorter and operations become more professional,' Fricke said. 'Italy especially is very advanced in establishing the new structure.'
In Italy, the Smart can be purchased or leased at all of the country's 90 Mercedes-Benz dealerships and at 1,200 branches of Banca di Roma, one of the country's biggest banks. In addition, it is being offered through an Internet-based selling organization.
DaimlerChrysler had planned for sales of 16,200 units in Italy in 1999, but the pace at the country's 23 Smart Centers was less than 600 a month.
'Clearly we did not have enough sales people for such a volume target,' said Maurizio Alagna, general manager for Mercedes and Smart sales at Mercedes-Benz Italia. 'The Smart Centers relied on 73 gentle salespeople - the ones who would say, `You can buy or not buy, no problem.'
'To reverse the fortunes of Smart, we needed much more pushy salespeople, so the first decision was to offer the Smart in all 90 Mercedes dealerships, which means the addition of 650 tough salespeople.'
At the Banca di Roma locations, customers can get information about the car and a loan for up to L25 million (euro 12,900) to buy a Smart. The flexible loan, offered at 6.25 percent annual interest, does not require a fixed monthly repayment. Alagna said Mercedes-Benz Italia hopes to sell 3,000 units through Banca di Roma locations by the end of the year.
A third move was to offer a lease program through an alternative sales channel: ITN, or Internet Television. This Web TV channel has 15,000 subscribers and a related direct sales force. The ITN lease deal is L195,000 (euro 100) a month, without a deposit.
In France, Micro Compact Car will recruit 70 Mercedes outlets by year-end to complement the present 17 Smart Centers. Meanwhile, new Smart dealerships will open in seven medium-sized towns - Lille, Rouen, Reims, Clermont-Ferrand, Limoges, Orleans and Troyes. But they will not have the Smart display towers used by Smart Centers.
Smart Centers in France will contract with Mercedes-Benz dealers in nearby cities. For example, the Toulouse Smart Center is in talks with the Mercedes dealer in Perpignan about opening a sales outlet.
Half of the Smart Centers in France are already operated by Mercedes-Benz dealers. Of the 23 in Italy, 21 are owned by Mercedes dealers.
According to Francois Le Clec'h, DaimlerChrysler France vice president in charge of Mercedes-Benz and Smart, only 1,548 Smarts were registered in the first six months of 1999. Le Clec'h is now targeting 5,000 sales this year - down from the initial forecast of 12,000 units.