Wednesday, April 01, 2009

'Orphan' Smart cars pile up as buyers back out

Tiny Smart cars are stacking up at some of the 75 U.S. Smart dealers because people who ordered them are refusing to take delivery.

Cheaper fuel prices blunt the appeal of Smart's 36 mile-per-gallon rating, and the recession has scared off some who ordered.

The $99 deposit a buyer must put down to order a car is refundable, so it's easy to say "no."

The development is fouling up Smart's sales system. It relies on Internet ordering and no costly dealer inventories.

Smart dubs the refused cars "orphans." Despite skittish customers, it still took just 28 days, on average, to sell a Smart in February, the Power Information Network notes.

That's twice as long as it took in summer, when gasoline peaked at $4.11 a gallon, but far quicker than the industry's average 95 days to move a car off the lot. The nationwide average for regular was about $1.96 Monday, the government reported.

"Are a few more people canceling (compared to) last year? Yes," says spokesman Ken Kettenbeil. "But certainly we're not seeing a huge falloff."

He says Smart has a bank of 30,000 prospective buyers who plunked down the $99 refundable reservation fee but have not taken delivery. About 35% back out, vs. about 30% in November.

Smart sold 1,415 cars in February, sales tracker Autodata says, down from the more than 2,400-a-month sales pace last spring and summer.

The base model sells for $12,645 with shipping. It's government-rated at 36 mpg in combined city-highway driving. Still, it competes with roomier but less head-turning hatchback subcompacts, such as Hyundai Accent and Nissan Versa. Both have sub-$11,000 models rated 29 mpg.

The 8-foot-8-inch Smart car is made by Daimler, better known for Mercedes-Benz, and distributed in the U.S. by Penske Automotive Group (PAG).


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