2015 Geneva Motor Show: Smart quits Australia

Smart pulls out of Australia

THE end of Smart in Australia is nigh. The introduction of an all-new third-generation ForTwo and closely related ForFour in Europe has forced Mercedes-Benz Australia to drop its slow-selling micro-car subsidiary brand after 12 years. No official announcement has been made, but Smart’s withdrawal is a certainty.

“I don’t think the [new] Smart will be launched in Australia,” Frank Zimmermann, Smart’s product marketing chief, told Wheels at the Geneva International Motor Show. “There’s no natural potential for these cars.”

Mercedes-Benz Australia Car Group managing director Horst von Sanden confirmed Smart would not import the new ForTwo and ForFour. “We have made the decision we will not go ahead,” he said. “I’m disappointed on a personal and professional level. The future of Smart is something I believe in.”

It is possible, he added, that the brand could be relaunched in the future. “I wouldn’t say Smart is gone forever, but we have to base this on a proper business concept,” von Sanden said.

According to Zimmermann, the brand needed a level of “street presence” to be viable. He doesn’t believe it is capable of reaching this threshold in Australia. Zimmermann insisted that the prices being asked by Smart for its new two- and four-seat models were not a factor. “Pricing is not the issue at the end of the day.”

The view from Australia is a little different. “Price leads to a certain volume,” von Sanden pointed out, affecting profitability for both importer and dealerships. And service costs, including spare parts inventory and specialist staff training, are reasonable only when shared among many customers.

The original Smart launched in Australia in 2003, five years after a purpose-built factory in France began producing the rear-engine and rear-drive two-seater. In the first years, the brand’s sales sometimes topped 100 per month, but last year only 108 Smarts (all ForTwos, the only model available) were sold in Australia. The brand’s local sales peak was in 2006, with 773 sales.

Various strategies have been tried to stimulate Smart’s sales rate. Most recently, in mid-2013, Mercedes-Benz Australia invested heavily in an online sales platform for the brand. This innovative measure delivered only a temporary lift in sales.

Early in Smart’s life in Australia, extra models were added to the line-up. But the ForTwo-based Roadster, a brave attempt to create a small, inexpensive sports car, was a failure. Only 43,000 were sold worldwide between 2003 and 2006. The first ForFour, based on the Colt and built in a Mitsubishi factory in Holland from 2004 to 2006, was likewise a sales flop everywhere.

In the wake of these attempts to diversify the Smart model line-up, the second-generation ForTwo reached in Australia in 2007. While an improvement over the original, the car’s key problems hadn’t been solved. It was relatively expensive and the jerky shifting of its robotised manual transmission made the car pitch uncomfortably.

Smart’s new models are the best yet. The third-generation ForTwo has a fine double-clutch auto that makes it much smoother to drive. And the ForTwo is a real Smart, not a rebodied Mitsubishi.

There’s bitter irony in the fact that the best Smarts ever will be the first not to make it to Australia.

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