M-B backs Smart with ads, deals
Exec: Efforts are the first for brand in U.S.
Smart USA will launch a TV, print and digital marketing campaign by year end to jump-start the struggling microcar brand that Mercedes-Benz USA took over on July 1.
"People are not avoiding the brand or the product, but there is a great majority of people who are not aware of the brand," said Tracey Matura, the new general manager of Smart USA.
Mercedes is also offering lease and finance deals for the Smart brand through its Mercedes-Benz Financial Services captive finance arm. Leases starting at $179 per month for 24 months and 0.9 percent interest for 36 months and 1.9 percent for up to 60 months were launched last week.
The TV and print advertising and competitive finance programs will be a first for Smart in the United States, Matura said. She would not say now much the programs will cost.
"We will do things the same way as we do on the Mercedes-Benz side -- that is the benefit of having an organization like Mercedes-Benz USA behind you," Matura said in an interview last week.
"Leasing and APR programs are especially important when you are trying to attract new customers to the brand," Matura said.
Mercedes-Benz took over the distribution, sales and marketing of the ailing Smart brand from Penske Automotive Group. Smart is owned and produced by Mercedes' parent, Daimler AG, but the U.S. distribution was given to Penske in 2008.
Penske Automotive Group relied primarily on social media and event marketing to promote the Smart brand. Sales of the ForTwo microcar soared to 24,622 cars in 2008 as gasoline prices reached record highs. But as gasoline prices fell and the recession took its grip, Smart sales tumbled, falling to 5,927 cars last year. Through June this year, Smart sold 2,556 cars.
"The guerrilla and alternative marketing were great for the first one-and-a-half years, but then the world changed and Smart not being a fully established brand was one of the first to suffer," said Jay Agresta, president of Benzel-Busch Motor Car Corp. in Englewood, N.J., and one of the first Smart dealers in the United States. "What we need now is the marketing muscle of Mercedes-Benz."
Agresta said he's convinced that Mercedes-Benz Financial Services also will make it easier to finance first-time buyers: "That was one of the big pieces for us. We lost access to the first-time buyer, and now we have lots of access to credit."
Matura won't forecast how many more Smart cars Mercedes-Benz will sell, but said she's convinced the brand's potential hadn't been tapped. For starters, Mercedes-Benz can pitch Smart to young and urban buyers -- the audience Penske Automotive Group initially targeted. Today, most Smart buyers are 45- to 50-year-old men living in the suburbs, Matura said.
Only 75 Mercedes-Benz dealers are selling Smart, 53 appointed by Penske Automotive Group and 22 new dealers, Matura said. By year end, 100 Mercedes-Benz dealers will be selling Smart, she said.
Penske Automotive Group took back the franchise from 22 non-Mercedes-Benz dealers who had built separate or stand-alone showrooms for the Smart brand and bought back vehicles and tooling.
Matura said Mercedes-Benz no longer requires separate or stand-alone showrooms but wants a special corner within a store.
To level the playing field, Mercedes-Benz is paying dealers who built separate facilities and showrooms a monthly 1.5 percent facilities bonus for every Smart vehicle they sell, Agresta said.
The next-generation Smart car being developed by Renault SA and Daimler AG won't come to market until 2014. The redesigned ForTwo and the third-generation Renault Twingo will be built on a new joint platform.
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