DaimlerChrysler is trying to stem losses at its troubled Smart unit and has announced that the Mitsubishi Colt-based ForFour compact hatchback will cease production. It joins the lovely Smart Roadster and Coupé in the scrapheap in the sky.
There has been some debate over whether the Smart brand was wrongly deﬁned, and that this was another DaimlerChrysler gaffe—along with its early mismanagement of Chrysler and the decline in quality of Mercedes-Benz vehicles.
I don’t think the brand was bad. The idea is good enough: cars marketed as fashion items. BMW has done it with the Mini, for example. Smart stood for cheekiness, building more on the Swatch culture than anything from Mercedes-Benz.
This may have proved troublesome for DaimlerChrysler, used to selling premium products and ﬁnding it hard to adjust to being a consumer goods’ company. Hence, it never knew what to do with Plymouth (so it killed it), and the model explosion at Mercedes-Benz did lead to its gradual slipping down the J. D. Power surveys.
The original Smart City-Coupé could have been a hit, like the original Swatches. But the Mercedes-Benz ideas came through, namely its premium pricing. Sure, it may have been an advanced little car—and marketing textbooks did dictate that the advancement and fashion positioning should tend to attract a higher price.
But did this work with the brand? If Swatch meant value, then surely Smart would, too? A high price didn’t gel with the way the car was being promoted, with its cute plastic boxes, apeing watch cases, at dealers.
With this chasm between what people thought the Smart brand stood for, and the reality as a pricey toy, the little car never revolutionized motoring in the way Swatch took its market by storm in its early days.
Yet DaimlerChrysler still lost money on the cars. Someone in the planning department wasn’t doing a decent enough job, using the brand as the lynch-pin that held every other concept in place.
Meanwhile, Volkswagen claimed that its more “normal” city car, the Lupo, had more room and cost less. But that is not what really killed the Smart.
Nor did the lack of foot trafﬁc to Mercedes-Benz dealerships, some of whom took on a Smart franchise. The existing customers weren’t going to touch a Smart, and no new ones came because of the high price.
What killed Smart’s chances was the earlier realization by other manufacturers that small cars should be sold with a fashionable bent. By the time the Smart came out, Ford already had its Ka and Renault its Twingo. Both were fairly functional, spirited in their drive, and didn’t suffer from the whiny powerplant and questionable handling of the Smart.
In essence, the market had value-packed, mass-marketed fashionable cars—the equivalent of H&M—while Smart was trying to tell us it gave you less, and charged more. It was still ready-to-wear, but with prices approaching that of couture.
And the city-car-as-fashion-item principle hasn’t abated. Fiat has its Panda and may come out with a new Cinquecento. Ford will redo the Ka on the same platform. Opel will have a new Corsa soon, while Toyota’s Vitz/Yaris is as funky as they come. Peugeot–Citroën has the 107 and C1, twinned with the Toyota Aygo. Against these, Smart looks like an anomaly, a curiosity like the BMW Isetta is today. At least the Smarts will be respectable and earn a great deal of affection as a classic car in 25 to 30 years’ time.
DaimlerChrysler usually does better with a car’s second outing, and a new Smart ForTwo (ForTwo MarkTwo?) will be out in 2007, the sole car to carry the Smart nameplate. However, the competition looks ﬁercer, and I doubt that DaimlerChrysler knows how to reduce the price of a car to really capture the masses.
Indications show that the next ForTwo won’t be a world-beater like the Mini, the Fiat 500, or the Volkswagen Käfer. It will be just another premium-priced toy, and possibly the last car to have the Smart brand, if things don’t change there.
Del.icio.us tags: Smart | DaimlerChrysler | branding | brand | marketing | fashion | premium | pricing Posted by Jack Yan, 13:03
Hi Jack - the brand is clearly broken all over the place. Check out my horror story in dealing with that company http://www.emergencemarketing.com/archives/2006/03/mercedes_a_case_study_on.php
Thank you, François, for the latest. I read Emergence Marketing regularly but it’s nice to get a personal invitation from you. I also agree with everything you said—and that you are not alone. I recall there was a Mercedes-Benz US site set up by an unhappy customer, and I have a few horror stories to tell as well.
2008 Toyota Aygo is expected to compete with the upcoming 2008 Smart Fortwo. The design resembles some details from the Toyota Yaris hatchback, but the Aygo has a shorter and smaller dimensions.Post a Comment
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