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February 25, 2005

Small car takes aim at big U.S. market

The Los Angeles Times
When will Los Angeles get Smart?

Soon, says Steve Schneider, chief executive officer for Zap, the Santa Rosa, Calif., company now selling Americanized versions of the adorable European nano-car. None too soon: Keebler elves everywhere are holding their tiny breaths.

Zap received the feds’ approval to sell the Smart coupe and cabrio in November but must wait for certification from the California Air Resources Board before selling them in this state and four Northeast states with similar emission standards.

"It’s just a matter of the application process," said Schneider at a recent open house at Smart Auto LLC’s warehouse in Santa Ana, Calif. "We should have it in hand by June."

That will give folks looking to downsize from their Mini Coopers an option.

The Smart City Coupe — a neon-colored iPod of personal mobility — is small in a big way. Measuring a stumpy 8 feet long, the two-seat, ovoid runabout is 4 feet shorter than a Mini Cooper.

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It can actually park perpendicular to the curb — at last, help for the parallel impaired. At less than 5 feet wide, it’s a half-foot narrower than the motorized minnow Chevrolet Aveo. And tipping the scales at 1,749 pounds, the Smart weighs only about a quarter what a Hummer H2 weighs.

But, on freeways, how smart is that?

"This car is very strong, very safe," said Thomas Heidemann, president of Smart Auto LLC, which imports the car and modifies them for Zap to sell. The Smart, starting at about $15,000, comes with dual air bags, anti-lock brakes and electronic stability control as standard equipment.

Built by DaimlerChrysler in France, the Smart car — with what the company calls its "Tridion" safety cell structure — survived brutal crash tests, one of which pitted the little car against a Mercedes-Benz S-class sedan. According to Heidemann, "The passengers in the Smart car came out better than the ones in the S-class."

Volunteers? Anybody?

"If safety is your top priority, you shouldn’t be in a small car," said Russ Rader, spokesman for the Insurance Institute for Highway Safety, an industry group that rates vehicles’ crash-worthiness.

"In a crash with a heavier vehicle you are always at a disadvantage, regardless of how well the vehicle does in a crash test."

As for buying insurance for the tiny cars, the news isn’t all bad. Insurance companies base their rates on the claims experience of a particular vehicle and index that data with the type of coverage: liability, medical payments, collision and comprehensive (theft, fire, weather damage and so on).

"It may be that one model generates more collision claims and less in liability," said Dick Luedke, spokesman for State Farm Insurance, the United States’ largest auto insurance provider.

For a car new to the market, the only guide is the sticker price of the vehicle. "For a new vehicle, that would be our starting point on collision and comprehensive coverage," Luedke said.

In other words, cheap cars are cheaper to insure. "For liability and medical, we would start them at a neutral level and then watch the data."

To meet the demanding side- impact standard of U.S. crash tests, the Smart’s doors must be reinforced with aluminum cross beams. Yet, surprisingly — since the U.S.-bound Smart power plant is an insky 698-cc turbocharged three-cylinder motor — the EPA’s emission standards gave the engineers more trouble, requiring some re-plumbing of the engine intake and reprogramming of the engine management computer.

It takes two to three weeks to convert the Smart into a U.S. street-legal automobile.

Zap (online at www.zapworld.com) has a waiting list of more than 9,000 buyers nationwide and has taken more than $40 million in purchase orders from more than 50 dealers anxious to add the Smart to their showrooms, Schneider said.

For the environmentally conscious, the Smart offers the best fuel economy of any non-hybrid car: 55 miles per gallon on the highway.

Last week’s open house included parking lot test-drives with the U.S.-legal Smart, and I took one for a 1,000-yard test drive. Also, I have rented the cars in Paris, where they are bon, and in Germany, where they are "nicht so schlecht." Smart cars are hilarious fun to drive in city traffic (Paris), being able to wend through openings in contentious traffic almost like a motorcycle.

They are less fun on the Autobahn. While the car feels peppy enough around town, its 0-60 mph sprint of 15.5 seconds and top speed of about 85 mph may leave the car gasping to keep up with Vespas and ice cream trucks.

Zap’s Smart start-up takes place against the backdrop of, well, let’s call it size anxiety regarding small cars in the United States. DaimlerChrysler recently froze plans to bring a larger Smart vehicle — a bite-size SUV called the ForMore — to the American market and only last week put off introduction of yet another premium subcompact called the B class. Other carmakers, buoyed by the success of the Mini and forecasting long-term discontent with fuel prices, are bringing demitasse premiums stateside, including the Audi A3 and the BMW 1. Nissan is rumored to be considering its Cube microcar for the American market. The question is, how small is too small?

"Vehicles like the Mini have shown that premium-priced vehicles from a strong brand, regardless of what size they are, are very appealing to people," said Wes Brown, a consumer analyst with Iceology in Los Angeles.

Above all, Brown said, the Smart is a fashion statement. "It says that the owner is a little different, a little more European in their thinking, more cultured, more sophisticated . . . more affluent is the impression."

In fact, the Smart — designed by the Swatch Group, makers of the boldly designed watches — is loaded with style. Like the watches’ wristbands, the Smart’s body panels are interchangeable and come in bold metallic colors (such as "phat red" and "stream green") and graphics. While the bare-bones models will sell for about $15,000, Smarts can be loaded to the gills with luxury-car options, including heated leather seats, moon roofs, navigation systems and more. A maxed-out Smart Cabriolet can cost $23,000, a price that would put it at a disadvantage against much larger, similarly equipped cars such as the Scion tC.

"As a value statement, it isn’t," Brown said.

No matter, Brown said. "Trendsetters are willing to sacrifice certain things for having a vehicle that makes them feel so great about themselves and stands out so strongly."



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