Penske, who is chairman of Penske Automotive Group Inc. — the country's second-biggest public dealership group — appears a little amazed at the sales numbers. That's evidenced by the big smile on the face of the silver-haired, impeccably dressed racing mogul and entrepreneur billionaire.
"We were contemplating 15,000 to 16,000 in our first year, and as we entered into probably the most unique marketing of any brand coming into the market — Smart with a $99 reservation system — the Internet became the medium for us to build to a brand," Penske said in an interview last week at the Detroit auto show.
Smart did no traditional TV or print advertising. Instead, it relied on the Internet and a 50-city road show where more than 50,000 customers took test drives.
Will sales hold up in Smart's second year? Penske says 40,000 people who have put in a $99 reservation through the brand's Internet ordering system are clamoring for a Smart. Sales are on a first-come, first-served basis.
Based on 2008 data, Penske says he expects 55 percent of the reservation holders to take delivery of a car. An additional 8 percent of sales is expected to come from so-called orphans — vehicles that customers ordered and then didn't buy.
Based on the number of reservations and fourth-quarter demand, Penske thinks Smart could sell 25,000 cars this year.
The Smart reservation and order system has enabled Penske to "stay connected to the customer because dealers don't have that direct contact."
For 2009, the company has set up Smart Express. In markets with heavy reservations and a long waiting period, Smart finds orphans from other markets and pairs them with reservation holders.