Professional Football Players and a Smart Car

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Look, even professional football players can fit in the Smart Fortwo...

Putting together a unique story, one Canadian reporter thought up the idea of a Smart car story and professional sports palyers, all in one. See the article at

Mercedes B-Class is coming to the USA

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Bloomberg is reporting that Mercedes is planning to bring the B-Klasse to the States.

July 25 (Bloomberg) -- DaimlerChrysler AG, the world's second-biggest luxury automaker, is designing a version of its Mercedes-Benz B-Class car for sale in North America for the first time, the company's top U.S. executive said.
The B-class, available in Europe since 2005, is due for redesign in 2011 or 2012 and prototypes include a model that would meet North American regulatory requirements, said Ernst Lieb, chief executive officer of Mercedes-Benz USA. The mini crossover is bigger than General Motors Corp.'s Chevrolet Aveo and smaller than Toyota Motor Corp.'s Corolla.
The B-Class would join Stuttgart, Germany-based Daimler's Smart car among smaller, higher-mileage autos being offered as rising gasoline prices prompt U.S. buyers to consider more fuel- efficient models. Daimler scrapped plans to redesign the current B-Class model for the U.S. about a year ago because the euro- dollar exchange rate made it too costly.

A Look at Smart Car History

I must admit that I am not one for history but if you can teach me some history via pictures... I am all for it!

Class, lets begin!


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Smart Car Meet in Idaho

I would have never thought that there would be a Smart Car meet in Idaho long before I the general population has a chance to own a US model smart car but with the love for this car, it doesn't surprise me. Check out this group of smart fortwo owners that were able to get together and share their smart love!





The guys over at CarDomain have a good question at bat, is the Smart safe?

Mercedes-Benz is taking the two door coupe to a new dimension with the new 2008 Smart ForTwo, supposedly making its American Debut in early January 2008 for twelve thousand dollars. They boast that this Smart Car is as safe as a normal car two to three times it size. This little 1,700 pound, 71-hp three banger is able to fit two across on a normal highway lane (is Mercedes suggesting that Smart drivers drive that way?). Some have claimed that "there's no fear of being run over" because "the ForTwo's height and bright colors make it easy to see" and it is a "hard target to hit." Look, our highways aren't shooting ranges, and I don't see why going smaller will prevent accidents. Compared to the 18-wheeled monsters on the highway today, this little whip doesn't seem to have a chance. Take a look for yourself.

See what the comments are at CarDomain

Smart Car Spotted on Rodeo Drive

I was out and about on checking out all the action around town today and was a little shocked to see this Smart Fortwo parked out on Rodeo Drive. Need less to say I imagine the owner was just trying to market it and sell a few before smart usa is able to get theirs out on the showroom floors!

Smart Tour on the Way to Michigan

You would be amazed how many emails I receive asking when the smart tour will be in a particular city and where it will be when it gets to each city and most the time I refer these seekers over to Smart Cars of America which seems to provide the most relevant news about the Smart's arrival to the US but there are a few things I can tell you about the Smart making its way to Michigan.

The Michigan stop will be huge. It's not widely known but Michigan currently has the largest number of orders for the Smart Fortwo, yes, even more then NY and LA. Don't ask me why all these automaker fellows want this car but they are all on the band wagon and will surely be stopping by one of the Michigan stops to rub elbows with smart usa and other hob-knob OEMs.

See ya there ;)

Will Smart USA be giving us some luxury?

Now I do not know the validity of this piece but I like the idea...

And just in case smart doesn't decide to give us a nice offering to our smart options, I am sure there will be tons of availability of such products for us in the near future!

[Source Smart Car of America]

Will the Hybrid Smart Make it to the US

Everyone is asking right now if the US will get the latest Smart Car Hybrid with start and stop technology and like many other things that smart usa will not tell us, the anser is likely NO. We know we are not getting the diesel engine smart so why would we get this added technology.

A little about this new technology:

The combination of an electric motor and a combustion engine makes the smart fortwo even more economical and environmentally friendly than ever. The hybrid concept reduces consumption and emissions for both the diesel and the petrol version by around 12 percent. For example, the standard consumption (NEDC) of the smart fortwo hybrid drive (hd) diesel is reduced from 3.3 litres to 2.9 litres per 100 kilometres. Carbon dioxide emissions fall from 88 to 77 grams per kilometre. This means that the CO2 champion is setting new standards for the "three litre" car. No other diesel car is more fuel-efficient and climate-friendly.

And now, the photos that will really make you jealous!!!

Spotted: Smart Car in Santa Monica

It's not too often that you come home from beign out for the day and find a Smart Fortwo parked in the midst of America and only taking up half a parking spot compared to all the cars around it but this is just what happen to me only a few days ago. The two lads in the vehicle were on a west coast trip down from Canada! Wow, what a drive! Have fun Jay and Greg!

Smart USA Reports 20,000 Reservations

In a news conference yesterday Dave Schrembi reported that Smart USA has hit 20,000 in reservations... but wasn't that the news 3 weeks ago? Dave, how about you make a call over to your reservation group at Internet Brands and find out your real numbers!

Penske Automotive Group (PAG) Exceeds Goal with Smart Reservations
In a press conference yesterday in Detroit, Smart USA President Dave Schembri said they have received more than 20,000 reservations for the Smart Vehicle that will be available at some 45 - 60 dealers beginning in January 2008. (Source: Wall Street Journal, January 11, 2007. Page D4).

But for the first time, smart usa began to talk numbers with the public and discuss the possible success of the smart car in the US and we commend them for bringing this to the forefront!

But either way, here is the rest of the story broken down by

Keep in mind that the reservations only require a $99 deposit. So people can still back out. But it is a heck of a lead.

If all reservations are filled, it works out to 333 to 444 Smart vehicles per dealership.

However, Penske Automotive is the distributor of Smart. So this does not mean Penske Automotive is going to own all of the stores. They own some of the stores. But a lot of the stores are owned by other dealers (including some of the large public dealers).

So you likely won't see a huge boost in gross profit dollars or percentages (and actually it might cause a slight drag in 2008).

As a reminder, Penske Automotive made about $2,993 in gross profits per new vehicle in 2006 and $2,427 per used. Also if you take the company's fleet and wholesale gross profits divided by the total retail units (because I hope wholesale is looked at as driving used vehicle sales and fleet possibly helps drive some new vehicle retail sales) you come up with $14 gross profit per retail unit.

My guess is that Smart counts as a fleet sale and so you see the $14 figure go up a bit in 2008. But you will also see total gross profits as a percentage of revenues decline a bit (all else equal).

But dollars per unit and percentages are less important than return on investment [ROI]. So if Penske is essentially collecting a "toll" on every one of the units being sold at the stores, it can make for a pretty attractive ROI.

Now I don't know what Penske Automotive will make on the sale of each Smart vehicle (through the distribution agreement). We can all try to guess ($200/$300 per unit?) But we just don't know.

And this can create problems when trying to model the impact Smart will have on the company's financial results in 2008. So let me give you some numbers to work with.

We know that management said they expect to earn between $1.40 to $1.50 per diluted share this year (2007). This guidance assumed 94.6 million shares outstanding throughout the year (a couple million more than they had in the first quarter). And this works out to $135 million to $145 million in after tax earnings in 2007.

Included in the earnings guidance, management also said they will have $0.02 to $0.04 cents a share in costs associated with the launch of the new Smart vehicles. Or, $2.0 million to almost $4.0 million in after tax expenses. They've got around a 37% tax rate. So if I put these numbers on a pre-tax basis, we're talking about $3.0 million to $6.0 million bucks in expenses associated with Smart.

I suspect the conservative nature of the Penske organization only includes direct costs with Smart. For example, Sr. Vice President Tony Pordon has been playing a key role with Smart. But he also continues to exercise his duties as head of investor relations. So do they divide his salary and include it in the Smart costs? I suspect not.

Instead the $3.0 to $6.0 million in expenses being called out by the company on the conference calls are probably set up costs (systems, administration, etc.). And also some of the "road show" marketing that the company has been doing with signing up dealers and even sending the vehicle around the country to increase awareness.

They may have more expenses when they actually go live (distributing to the 45 - 60 dealers), they may have less. We don't know.

But based on the expenses we know right now (the $3.0 to $6.0 million), what it tells me is that at 20,000 Smart unit sales, Penske needs to make $150 to $300 per vehicle to break even. And at 40,000 units (so 2x the reservations) the company needs to make $75 to $150 per Smart to break even.