ZAP Lands More US Smart Orders...But Car Future in Doubt

30 December 2004

ZAP (earlier post) has pulled in a second 100-unit wholesale purchase order worth $2 million for its Americanized version of the Smart Car, bringing its total wholesale fleet orders in-hand to $4.98 million.

ZAP’s consumer auction of Smart cars on eBay was suspended a few weeks ago, pending completion of the Americanization of the vehicles. Bidding hit more than $27,000 for the Smart Car Americanized by ZAP within hours of its listing.

“We wanted to get a car on eBay right away with no reserve pricing, or no minimum bid, to evaluate the demand and price point for the car. At $27,000 for a 2003 model year Smart Car, it shows us that our proposed pricing structure is currently below the market demand,” said [CEO] Schneider. “There is not a better place than eBay to establish the market value for any new product.”

The Washington Post provides background on the bringing of the Smart car to the US, both by DaimlerChrysler and importers such as ZAP.

ZAP’s analysis of the US market demand for Smart cars (and their profitability) may be different than the manufacturer’s.  DaimlerChrysler is re-evaluating its strategy for the cars, which have been money losers.  The company originally was to introduce a Smart version of an SUV—the smart formore—at the upcoming North American International Auto Show. It has pulled the formore from the event, however, and put development on hold for three months.

Only a couple of months back, the chief financial officer of DaimlerChrysler, Manfred Gentz, said that the future of Smart was being considered at all levels, including selling it off or discontinuing it.

At the time, Walker and other DCX executives denied that those actions might take place. But with this recent decision on the model deemed critical to Smart's success in the huge U.S. market, suspicion has been raised again.  —Globe and Mail

Smart cars currently are being sold in Canada. The Smart fortwo coupé uses a 3-cylinder, .8-liter diesel that produces 40.2 hp (30 kW) of power and 73.8 lb-ft (100 Nm) of torque. Combined cycle fuel consumption is a low—but not class-leading—4.21 liters/100 km (56 mpg). CO₂ emissions are 90 g/km.