Case Study: Smart ForTwo: One Car for Narrow European Alleys

Auto manufacturers have long-understood the need to make smaller and more efficient vehicles. While large trucks and SUV’s dominated the market at the turn of the century, the trend toward smaller and more efficient vehicles did not sneak up on anyone. According to a report published in 2001, “automobile manufacturers are under increasing pressure to lessen the adverse environmental impact of their products—pressure that will likely encourage car companies to spend greater resources on the development of smaller, more fuel-efficient vehicles that increasingly meet the wants and needs of their customers” (DeGroat, 20 Dec 2001). Having previously identified such a trend, Mercedes-Benz was experimenting with a new vision for cars going forward: The Smart Car.

As a manufacturer of high-quality automobiles, Mercedes-Benz understood the need to carefully protect their image as a premium car-maker. This reality needed to be combined with the ever-changing marketplace. Understanding the need to begin producing smaller and more efficient cars, the Smart was launched in 1998. At a time when Detroit-based car companies were building bigger and bigger automobiles without regard to fuel economy, the Smart-design offered consumers an affordable, two-seat car. Having originally designed Smart cars for the small and crowed streets of Europe, the company has attempted to enter the U.S. market in recent years. The Smart ForTwo model was launched in Europe in 2007 and was designed to meet the requirements of the United States. This car was designed to meet governmental regulations within the U.S. market, however other aspects of the Smart ForTwo will take some adjustments for American consumers. According to Consumers Reports (April 2009), the SmartForTwo “features a 1.0-liter, three-cylinder engine that can keep up with traffic but is very slow when starting from a stop.” In addition to performance concerns, American consumers have been slow to adjust to a small car design. The challenges of converting consumers to a new design have troubled the European car maker in its attempts to market the Smart ForTwo in the United States. The marketing team at Smart determined to market their car towards trend-setting young people and internet savvy consumers. In an attempt to rebuff perceptions of inferior design and ease consumer apprehension, “the company staged a 50-city road tour so people could drive the car” (Lascu, 2008, p. 284). Having faced many challenges in developing the new concept for a global marketplace, the Smart design has begun to gain noteworthy traction.

Many consumers are hesitant to try new things. Seeking comfort in the familiar, Americans presented a challenge to the executives at the Smart Car Company. Car manufactures must continually assess market conditions to adjust their branding strategy, vehicle designs and concepts. While the Smart ForTwo may meet with wide acceptance in Europe, designers may need to modify the American product to meet consumers’ expectations. “Most Americans want a car with better fuel economy, but only about half say they would be willing to sacrifice size or performance to get it” (Valdes-Dapena, 24 May 2007). This trend may change, but remains a challenge for the Smart ForTwo today.

References

Consumer Reports . April 2009. Best & Worst 2009 Cars. P. 66.

DeGroat. B. 20 Dec 2001. Smaller, more fuel-efficient vehicles may gain buyers in next decade. On-line. Available from Internet
http://www.umich.edu/~newsinfo/Releases/2001/Dec01/r122001c.html, accessed 4 April 2009.

Lascu, Dana-Nicoleta. 2008. International Marketing (3rd ed.). Mason, OH: Cengage Learning.

Valdes-Dapena, P. 24 May 2007. We want better mileage - but power and size, too. On-line. Available from Internet http://money.cnn.com/2007/05/24/autos/cr_mpg_survey/index.htm, accessed 4 April 2009.