DETROIT -- Roger Penske plans to steal a page from Mini's playbook when he starts selling Smart cars in America in 2008.
Penske thinks his UnitedAuto Group Inc. can profitably distribute DaimlerChrysler's stylish Smart ForTwo minicar by signing 30 to 50 franchised dealerships in urban markets, setting modest sales goals and relying on unconventional marketing techniques.
Some Smart franchises will be assigned to dealerships owned by Penske's UnitedAuto Group Inc. -- but not all. "This will not be an exclusive UnitedAuto network," Penske said. "We need to pick the best partners."
Penske made his remarks last week after DaimlerChrysler AG CEO Dieter Zetsche announced plans here to introduce Smart to the United States.
Initially, Smart dealers will have one nameplate to sell: the ForTwo, a tiny, two-seat city car. Later, DaimlerChrysler may add a diesel option, a cabriolet and perhaps a hybrid-powered model.
Dave Schembri, a former Mercedes-Benz executive, will be president of Smart USA, a new, wholly owned subsidiary that UnitedAuto will set up to market and distribute the cars.
Schembri and Penske did not announce sales targets, but they have modest expectations. On a per-store basis, Smart dealers might expect to match the unit sales volume of Mini dealers -- about 40 cars per month. If so, Penske could expect to sell 15,000 to 20,000 per year.
The business case for Smart is designed to give dealers a chance to be profitable within the first year, Penske said. With a likely base price of $15,000 or so, the ForTwo will not deliver the profit margins of a luxury car. But dealers can expect to sell lots of accessories to customers -- just as Mini dealers do, Penske predicted.
"You can get wheels, you can get upgrades, you can get radios and you can get panels with different colors," he said. "This vehicle is almost like an Erector Set."
Because Penske will set up the dealerships, DaimlerChrysler can keep its costs low. The automaker's total investment in the U.S. Smart network will be substantially less than $100 million, estimates Arndt Ellinghorst, an analyst for Dresdner Kleinwort Wasserstein in Frankfurt.
Thus, DaimlerChrysler can boost worldwide Smart sales a bit without much financial risk.