Minicar, once popular, is widely ignored now.
The Smart ForTwo has lost its appeal. Then again, the diminutive city car from Daimler never had the broad appeal in the United States it has long enjoyed in Europe.
Gas Prices
Introduced to the US market in January 2008 and marketed by the Penske Group, Daimler had high hopes that its Smart car would be well received in the United States with gas prices north of $4.00 a gallon. For a brief time it did, with dealers selling most of the cars on their lots quickly.
Featuring a base sticker price of under $12,000, the Smart ForTwo seemed to present a good alternative to used cars and by getting 41 mpg on the highway it was easily the thriftiest of all gas powered models.
Slumping Sales
But the ForTwo hasn’t maintained its momentum. In fact, sales have slid almost as fast as the price of gas. With gas prices average $2.50 per gallon, the appeal of a very limiting two-seater has faded with it. Importantly, a number of cheaply priced cars seating as many as five passengers have joined the market including the Toyota Yaris, Honda Fit and Nissan Versa. Indeed, some models of the Versa are actually cheaper than the Smart even though the ForTwo maintains a slim mileage edge.
That mileage edge is being challenged by the Ford Fiesta with one model of this subcompact achieving 40 mpg on the highway. Even the Chevrolet Cruze, a larger compact model, is also expected to hit 40 mpg when it is released in Fall 2010.
Daimler Solutions
Some of the solutions Daimler has taken has involved rolling out new color schemes and options. Those changes only go so far as the car hasn’t been updated in years (it has been on sale in Europe since the 1990s) and consumers are always looking for what is new.
One suggestion that Daimler is mulling is to bring back its Smart ForFour model. Yes, you guessed it — a 2 + 2 version of this car, amending one of the overriding problems with the Smart ForTwo. Daimler is working with one of its partners, Renault, to develop a next generation ForTwo and the ForFour seems to be a likely extension of that relationship. Yes, the Renault Twingo platform will be the basis for these cars, a car line that has been successful for the French automaker thus far.
Americans are looking at small cars like never before. However, the Smart’s limitations mean that its best chance for success is in large cities where parking is a premium and where smaller cars aren’t as likely to be t-boned by anything larger than a Hummer.