MONTVALE, New Jersey -- Daimler AG's Smart plans to spend as much as $35 million on a new marketing campaign as the small-car brand seeks to remake its image in the U.S. after sales plummeted 76 percent over two years.
Smart, which had been distributed through Penske Automotive Group Inc. in the U.S., switched to Daimler's Mercedes-Benz U.S. operations on July 1 with Tracey Matura as the general manager. Sales of the brand fell to 5,927 last year from 24,622 in 2008, according to Mercedes.
"With the marketing activities that we're going to have, we'll see some positive momentum," Ernst Lieb, head of Mercedes U.S. operation, said in an interview this week in Montvale, New Jersey. "The biggest problem the car has right now: Nobody knows it."
Daimler's attempt to reverse the Smart sales slide comes as competitors have introduced new small-car models in the U.S., including Ford Motor Co.'s Fiesta subcompact, General Motors Co.'s Chevrolet Cruze and the Fiat S.p.A. 500.
New ads may do little for sales because Smart is too small to succeed in the U.S., said Jesse Toprak, an industry analyst with TrueCar.com, a Web site that tracks automotive sales. "Their problem is not marketing or lack of awareness," he said. "Their problem is that their car as it stands now simply doesn't fit the U.S. driver's needs. Unless they offer a new product that is more practically fitted to U.S. driving habits, they are simply not going to do much."
Smart began airing its first national television commercial this week that emphasizes the model's size. Its tagline: "Unbig, uncar."
J.D. Power & Associates found that 50 percent of customers were unaware of the Smart brand, Matura said. The average for other non-premium brands was about 18 percent, she said.
Mercedes has declined to provide a sales target for Smart. Matura said it's possible to reach 10,000 Smart sales in the U.S. next year. The brand intends to spend $25 million to $35 million on its new marketing campaign, she said.
Matura inherited 75 Smart dealerships and has already increased the total to 81, she said. She plans to have as many as 100 by year-end.
Global sales of Smart cars rose 6.6 percent in the first eight months to 69,073 units.