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Smart brand set to exit Australia

Case closed: The new ForTwo is now on sale in Europe but will not be coming to Australia, meaning the Smart brand will quietly disappear when stocks of the current model dry up.

Mercedes-Benz Aust/Pac unable to make business case work for new Smart series

Smart logo6 Mar 2015

By TIM ROBSON in Geneva

DAIMLER’S Smart micro-car brand in Australia is on the way out, with Mercedes-Benz Australia/Pacific revealing that cost concerns and fears about continued low sales have forced it to close the case on importing the new-generation model here.

The latest MR453-series Smart ForTwo and ForFour, based on the Renault Twingo platform, have just been released in Europe and were under consideration for Australia, but Mercedes-Benz Aust/Pac was unable to secure the vehicles at a low enough price point – starting at about $15,000 – to make them competitive in the marketplace.

The Australian subsidiary of the German luxury car giant still has stocks of the Mitsubishi Colt-based MR451 ForTwo on the ground, priced from $18,990 plus on-road costs for the coupe and $20,990 for the cabrio.

“The Smart brand will continue in Australia with the current model,” said Mercedes-Benz Aust/Pac senior manager of public relations, product and corporate communications David McCarthy.

“At this stage the new Smart will not be launched, but Mercedes-Benz Aust/Pac will continue to monitor potential opportunities in the market.”

Smart has achieved only around 4400 sales in Australia since launch in 2003, the vast majority of which were of the ForTwo.

The brand was a pioneer of the micro-car category, however Australian consumers have favoured vehicles from mainstream brands such as Mitsubishi’s Mirage which are cheaper, larger internally and sometimes better equipped.

A major pricing and model range realignment for the European Fiat 500 has also steered buyers in the direction of the ForTwo’s Italian rival as Mercedes-Benz Aust/Pac has worked through the business case for continuing the Smart brand.

Whether or not the new-generation models could achieve sales in the 600-per-annum range going forward and whether the opening price could be closer to $15,000 were key considerations.

“We got to a commitment point, and we simply couldn’t get it across the line,” Mr McCarthy told GoAuto.

“We’re disappointed. It’s an important car in our range, but you’ve got to be able to support it properly. There is a really compelling case for the car, but there’s just not enough people (to buy it).”

Mr McCarthy ruled out a strategy of offering a lower-specification car for Australia to bring the price point down.

“We could have imported a stripped-out one, but that’s not what people who buy the Smart really want,” he said.

“Smart exists in a very different place in Europe than it does in Australia, where it’s regarded as a premium brand.

“Exchange rates are always a factor, but it wasn’t based on what the exchange rate is now.

“It’s a combination of being able to support the dealer network and the dealers having enough throughput to make it worthwhile. The dealers who do sell it like the car and they understand the car, and don’t forget there is a pool of a couple of thousand Smart owners who might snap up the last of the current ones.

“A lot of them were return buyers, but there just aren’t enough new ones.”

Only 108 examples of the ForTwo were sold last year, down from 126 in 2013 – the year when Mercedes-Benz Australia/Pacific invested heavily in a total-service retail website for the Smart, moving the car to an online order-only model.

The category-leading Mirage, by comparison, managed just shy of 6500 sales last year while Fiat shifted almost 3000 units of the 500.

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