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Strategies & Market Trends : Can you beat 50% per month?

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To: Done, gone. who wrote (7941)3/11/2005 11:48:48 AM
From: Smiling Bob  Read Replies (2) of 19256
 
I don't see how a car that small would not get 60 mpg.
Zap rep says the EPA was flawed ie. it reported the highway MPG was lower than city, which doesn't make sense.
He also claimed they'd have 15k units out in first year with 9k presold. I'm a born skeptic, so I take claims with a grain of salt. But if they meet a good portion of that goal, they'll establish themselves as a legit player.
I've included the entire article, which affirms my hunch that the whole package is what sells, not just the mpg.

Smart Car Takes Hit as 60-MPG Claim Runs Up Against EPA Roadblock
# Importer Zap plans to challenge the agency's 37-mpg estimate for the Daimler-built vehicle.



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FUEL ECONOMY
ZAP CORP AUTOMOBILES FUEL ECONOMY
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ZAP CORP




By John O'Dell, Times Staff Writer

OK, the Smart car isn't that smart.

Zap made a big publicity splash with its plans to sell the tiny two-seat coupe, promoting it as the most efficient gasoline-powered vehicle ever at 60 miles to the gallon and lining up thousands of orders.

But before the French-made ultra-mini could even think about hitting U.S. roads, the Environmental Protection Agency ordered the Santa Rosa, Calif., auto importer to scale back its fuel-efficiency claims.

The federal agency's fuel economy estimate for the Smart car isn't 60 miles per gallon — it's 37, sort of like a Honda Civic.

Steven Schneider, Zap's chief executive, said that the company's fuel trials showed the Smart delivering readings of 50 to 60 mpg and that he intended to ask the EPA for a retest. Meanwhile, Zap has pulled the 60-mpg boast from its website.

Schneider said he wasn't worried, though. Zap has orders for more than $55 million worth of the cars, some 3,600 at the $15,000 base price. Even with a reduced mpg number, he figures the Smart's city-car looks and diminutive size — two can fit in the typical parking space — will still give it an edge in the crowded U.S. car market.

"It is just not the case that Americans only want big vehicles," Schneider said.

At 37 mpg, the Smart would have the ninth-best rating in the EPA's rankings for 2005.

It would be in league with the much bigger Toyota Echo and certain models of the Toyota Corolla and Honda Civic and behind the 50-mpg gas-electric hybrids sold by Honda Motor Co. and Toyota Motor Corp.

Several prospective Smart dealers and buyers said the reduced mileage affair was news to them and that they wanted to get their hands on the ultra compact anyway.

"It still works for an area like this," said Bob Field, co-owner of a Turlock new-car dealership with Chrysler, Dodge, Jeep and Subaru franchises. He's one of more than 100 dealers who have applied for Smart franchises.

"We have a lot of people who live here and commute 90 minutes to the Bay Area, to Fresno or to Sacramento," he said. "Getting good gas mileage makes sense."

Daniel Morvec, a 44-year-old graphics designer who sent Zap a $1,000 deposit for a Smart in December, called 37 mpg "still pretty good." In any event, the Rowland Heights resident said that what attracted him about the car was "its design — it is brilliant."

Weighing in at 1,700 pounds, the Smart is 8 feet, 2.5 inches long and 5 feet tall. It's powered by a rear-mounted, 3-cylinder, turbo-charged engine that, at 600 cubic centimeters of displacement, is smaller than many motorcycle engines. That's one reason it takes a Smart about 16 seconds to reach 60 miles an hour.

A Zap supplier, Santa Ana-based G&K Automotive Conversions, will adapt the Smarts so they will meet federal and California emission and safety standards. (Because the Smarts, built by DaimlerChrysler, are coming to the U.S. via a third company, they will have to be sold as previously owned models.)

It might be a while before the cars meet their owners. Only about 100 Smart cars have been imported and approved for sale so far, according to EPA spokesman John Millett.

Zap has applied for federal emission permits for 2004 and 2005 models, Schneider said, and is waiting to hear from the EPA.

He said Zap had also applied for California certification so the Smarts it imports could be sold in California and the four East Coast states that have adopted California's emission rules, which are stricter than federal rules.

Would-be Smart buyer William Sussman said he had been told his car would be delivered in July or August. He's not sweating it.

"I've been waiting a long time for a car like this to come along," said the 70-year-old retired physician, a Rancho Palos Verdes resident who owns a Lexus sedan and a small Toyota SUV and wants the Smart for cruising around the peninsula.

"I can wait a little more."
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