TURIN - The success of the Smart car in Italy could show DaimlerChrysler how to sell the tiny two-seater in other European markets.
The Smart is beating sales targets in Italy with help from innovative and aggressive marketing tactics. Rome has absorbed more Smarts (3,600) than any other European city. Milan is second, with 3,000 sales through early December.
Orders in Italy were on course to exceed 18,000 in 1999, second only to Germany.
'But if you consider the many units sold in Germany with heavy discounts to Mercedes-Benz employees, Italy should be the first retail market for the Smart,' said Jochen Prange, the outgoing president of Mercedes-Benz Italia.
Altogether, DaimlerChrysler expected Smart sales to surpass 80,000 in 1999 after receiving just 6,500 orders in the entire first quarter.
Mercedes-Benz Italia took over Smart distribution in April. Only 2,868 cars had been sold in Italy at that time, though DaimlerChrysler's target for the year was 16,115.
'We immediately realized that with only 22 Smart Centers such a goal was impossible,' said Francesco Barra, sales director for Smart at the newly created DaimlerChrysler Italia. 'Consequently, we started to think about different ways to sell this car.'
The first step was to offer the two-seater through Italy's 90 Mercedes-Benz dealerships. The same is being done elsewhere in Europe, but Italy introduced the idea. It was accomplished quickly and easily here because Mercedes dealers own 98 percent of Smart Centers in Italy.
By the end of November, the Mercedes stores had sold 5,880 Smarts.
In June, Mercedes-Benz Italia reached an agreement with Banca di Roma to sell the Smart through the Italian bank's 1,200 branches. Cars are displayed in the 20 biggest branches. Bank customers can receive a loan voucher worth up to euro 12,910 to be used at a Smart Center or a Mercedes-Benz dealer to buy a new Smart. The voucher is available at the ordinary bank loan rate of 6.25 per cent. Through November the bank promotion -the first of its kind in Italy - had led to 1,380 sales contracts and 3,000 Smart prospects.
Mercedes-Benz Italia estimates that around 70 percent of sales in central and southern Italy have been handled through Banca di Roma. Now sources say that DaimlerChrysler is considering a similar agreement with an international bank to extend the same kind of offer to the rest of Europe.
Meanwhile, Italian direct marketer Millionaire Multilevel Marketing had sold 2,823 Smarts and taken more than 5,000 requests for information through early December. The firm, which sells everything from magazine subscriptions to household goods, is offering an attractive financial package: a 36-month lease with no initial deposit, monthly payments of euro 100, and return of the car at the end of the period with no other charges.
In December, Mercedes-Benz Italia began selling Smarts through an Internet television organization, called IT&N/Freedomland.
More commercial initiatives are planned for 2000, though none have been announced. One is an agreement with a major luxury hotel chain, which would offer customers a 'bed and breakfast and car,' including the use of the Smart during the hotel stay. Another operation would involve an airline for a 'fly and drive' promotion, combining a plane ticket with a Smart rental at destination.
Since October, monthly Smart registrations in Italy exceeded 2,000 units a month. Nineteen ninety-nine is expected to close with over 18,000 orders and more than 14,000 units registered. The target in 2000 is 20,000 - 20 percent of planned Smart production.