Smart's sales organizations in different countries will have to battle each other to win a larger share of the marketing budget.
"If you are successful, you get more," said Ulrich Walker, president of Smart. "It will be a competition."
In the past, Smart gave each country's sales organization a fixed sum based on the how many units the carmaker expected the country sell.
In the future, each sales organization will receive part of its budget up-front and the rest will be earned based on performance. A company spokesman wouldn't says what goals have to be reached to earn more marketing cash, but did say, "The new model strongly takes into account actual success."
As part of its effort to boost sales, Smart will increase it market exposure in Europe, primarily to help stalling sales of the ForFour small car. Smart is a DaimlerChrysler subsidiary.
Help from Mercedes
To do so, Walker has negotiated a deal to have the brand's models sold at Mercedes dealerships worldwide. The company won't say how many Mercedes dealerships have added the Smart brand, but it did say that Smart added 175 new sales and service operations from January through May, 26 of them in Germany.
Walker pro-mises that all of the additional sale outlets will be at least a 30-minute drive from Smart's distinctive dealerships, characterized by their futuristic glass towers filled with Smarts.
The expansion of the dealer network is necessary to increase sales of the ForFour, a Smart spokesman said. He said that customers will drive 60km to find a dealership that sells the ForTwo, because it is the only 2500mm city car available.
"But if you are shopping around for a car the size of a Fiesta, you won't," he said.
Smart aimed to sell 50,000 ForFours in western Europe last year but achieved a volume of less than 40,000. Smart has not given a sales target for 2005.
The carmaker planned to build 150,000 ForFours at the Mitsubishi-owned NedCar plant in Born, Netherlands, this year, but through May production was 28,352 units, according to market researcher J.D. Power-LMC.