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M-B Officially Gets Smart, Though The Decision To Do So Might Not Be

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On: Tue, Jul 12, 2011 at 2:28PM | By: Andrew W Davis

M-B Officially Gets Smart, Though The Decision To Do So Might Not Be

Yes, the decision has been made to transfer U.S. distribution of smart cars to Mercedes-Benz, relieving Penske Automotive of its duty to tender ridiculous cars that nobody in this country wants to buy.

What, you didn’t know? Yup, the same Penske that sells just about every brand, including Bugatti, Rolls-Royce, Lamborghini, Bentley, Aston-Martin, Ferrari, Porsche, Alpina and, well, everything else, has had the pleasure(?) to carry the smart brand here in the U.S. since 2008.

Lucky them.

This takeover by Mercedes—which owns the brand anyway—should in no way be interpreted as a failure by Penske. Roger Penske’s car-sales arm could sell the ocean to seals, as evidenced by their 51.7% increase in first quarter 2011 income. So if it’s got the Roger’s name on it, it’s bound to succeed, right? No, it’s the car that’s to blame—or the sales methods. Actually, it’s both.

Mercedes-Benz should’ve hired the PR guys in charge of selling Daewoos in the U.S. so they could know EXACTLY what NOT to do. Instead, they decided to follow the failed (on our shores) Korean company and abandoned “traditional” sales methods in favor of ones that totally sucked.

If Automotive News can be believed, Penske Automotive Group “relied primarily on social media and event marketing to promote the Smart brand. [I want to interject the fact that AN capitalizes the “S” in “smart” while I stick with M-B’s all-lowercase. It’s NOT an editing mistake.] Sales of the ForTwo microcar soared to 24,622 cars in 2008 as gasoline prices reached record highs. But as gasoline prices fell and the recession took its grip, Smart sales tumbled, falling to 5,927 cars last year. Through June this year, Smart sold 2,556 cars.

“‘The guerrilla and alternative marketing were great for the first one-and-a-half years, but then the world changed and Smart not being a fully established brand was one of the first to suffer,’ said Jay Agresta, president of Benzel-Busch Motor Car Corp. in Englewood, N.J., and one of the first Smart dealers in the United States. ‘What we need now is the marketing muscle of Mercedes-Benz.’"

“Agresta said he's convinced that Mercedes-Benz Financial Services also will make it easier to finance first-time buyers: ‘That was one of the big pieces for us. We lost access to the first-time buyer, and now we have lots of access to credit.’

“Tracey Matura, the new general manager of Smart USA, won't forecast how many more Smart cars Mercedes-Benz will sell, but said she's convinced the brand's potential hadn't been tapped. For starters, Mercedes-Benz can pitch Smart to young and urban buyers—the audience Penske Automotive Group initially targeted. Today, most Smart buyers are 45- to 50-year-old men living in the suburbs, Matura said.

“Only 75 Mercedes-Benz dealers are selling Smart, 53 appointed by Penske Automotive Group and 22 new dealers, Matura said. By year end, 100 Mercedes-Benz dealers will be selling Smart, she said.

“Penske Automotive Group took back the franchise from 22 non-Mercedes-Benz dealers who had built separate or stand-alone showrooms for the Smart brand and bought back vehicles and tooling.”

It remains to be seen if Mercedes’ planned media blitz will lead to sales, but they can’t do any worse. Well, they might. Matura has been quoted as saying, "People are not avoiding the brand or the product, but there is a great majority of people who are not aware of the brand.”

I’m going to take the high road and stay away from any “poop-polishing” metaphors and just say that showing more people something they won’t buy anyway is NOT the way to make money.

How can smart sell more cars in America, especially as seeing that EVERYONE who wanted one ALREADY BOUGHT ONE, as evidenced by the steep drop in sales the brand’s experience?

How about building something Americans won’t laugh at? Oh, you are? When will—oh. Not until 2014? So Mercedes is—you’re kidding. They’re working with RENAULT to develop the next ForTwo?!?

God help them. And God help the earnest-yet-delusional folks they’ve recently hired as executives to run M-B’s new “smart team” here in America. They’ve been handed a can’t-win proposition—and a decent chunk of Momma M-B’s money for media-buys—so, maybe, it’s possible, you never know…


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