A Seismic Shift in the Cars We Drive Starting in 2009

It's not often that the world's auto makers all look at the same thing at the same time, but right now that's what's happening. Global planners at Mitsubishi, BMW, Nissan, Toyota, Suzuki, GM and Ford are all watching the same thing - the price of gas in America and U.S. sales figures of vehicle called the Smart Car. They are watching Smart Car sales and gas prices because of the gas milage the Smart Car gets; an incredible actual 46.3 mpg in the city and 68.9 mpg on the highway. How does the Smart Car get such incredible milage. It seats two, it is only 106" long, and the Smart Car has a 3 cylinder engine. It is only June of 2008 but the global planners at GM, Toyota and the rest may already have their answer.

Gas prices are predicted to stay near their current record highs. Official energy statistics from the government's Energy Information Administration say we'll be paying on average only about 8 cents a gallon less for gasoline through the end of 2009 than the $3.81 per gallon average we are paying today. As for the Smart Car, Smart Car sales are booming. Production for the little two-seater made by Damler-Chrysler is sold out for the next two years. Just one month after its January 2008 American debut, some 50,000 Americans had already taken a Smart Car for a test drive.

Only six months earlier, in June of 2007, expert automotive analyst Dave Terebessy at CSM Worldwide Consulting told MSNBC.com American buyers would have little interest in the Smart Car. and was quoted as saying Americans will, "avoid cars that are smaller than the subcompact vehicles already on the U.S. market such as the Honda Fit, Chevy Aveo and Toyota Yaris". Terebessy said, "American consumers are likely to forfeit a few miles per gallon rather than buy a car less than 150 inches in length".

General Motors also had diagnosed the Smart Car chance as poor. GM's Group Vice President of Global Product Planning John Smith's predicted a gloomy future for the Smart Car to the Associated Press in 2007. "Rising gas prices are boosting demand for small cars, but truly tiny cars like the Smart Car are unlikely to make gains". In addition GM's own consumer research studied showed that Americans prefered to drive bigger vehicles and would only downsize to point.

But that was the thinking before gas prices went out of control at the end of 2007- right before the Smart Car debuted. General Motor's own long-term internal forecast at the time showed gasoline prices would stay at about $2.50 a gallon indefinitely. Or as GM's global product planner John Smith said in March of 2007, "for quite some time to come".

It seemed back in 2007 that no one wanted to bet on the Smart Car in the U.S. market. Even Smart Car parent company Mercedes-Benz seemed to have hedged its bet, allotting only 25,000 cars via 74 Smart Car dealerships in the U.S. market for 2008.

In hindsight that was a mistake. Fueled by gas prices approaching $4.00 a gallon, the Smart Car started flying off the showroom floor as soon as the doors opened. To buy a Smart Car right now you have to reserve one with a $99.00 non-refundable deposit. Roger Penske, the CEO of Smart Car and the sole importer of Smart Cars into the U.S. market was quoted at autoblog.com and widely across the internet as saying that demand is so high, "dealers could offload 40,000" Smart Cars through those 74 dealerships this year.

It's seems it's only the factories, which are already running at full capacity, that are slowing otherwise amazing sales and Penske is already in talks with Mercedes Benz, the parent company of the Smart Car to get the Smart Car over here in quantity.

If the gas and Smart Car sales numbers continue to hold, Americans will not only be seeing more of the Smart Car. We will be seeing a whole new look at auto showrooms and on the internet in the Fall of 2009 as an avalanche of inexpensive new micro-mini-vehicles become available. Sales of the Smart Car and high gas prices may signal the start of a seismic shift away from the American vision of driving big cars.

The Smart Car is the only micro-mini car currently available. But manufacturers like Mitsubishi, BMW, Nissan, Toyota, and Suzuki, all have mico-mini vehicles available for the U.S. market. In Japan, such micro-mini cars are called Kei cars, (pronounced kay - short for keijidsha, meaning light automobile). In November 2007, Hiroshi Tsuda, the president of the Suzuki Motor Corporation told New York Times reporter Jerry Garrett, "We are looking at a number of possibilities for the U.S. market". Similarly, U.S. auto maker GM is watching Smart Car sales to guage the appetite of Americans for mico-mini cars. GM has mini-cars, like the 4-seater Chevy Matiz that is sold in Europe and Asia, that are capable of 50 miles per gallon. GM is now two years into a multi-year development program of mini cars that GM says will be the next generation and could be imported for sale in the U.S. The mini vehicles are being designed in South Korea and GM plans to build these mico-minis in multiple low-cost markets before the decade ends. The most likely early entry in the U.S. market in quantity could be a Toyota - Toyota's micro-mini called the IQ.

According to a poll of 200 people conducted by the by thedailyfueleconomytip.com this year, 9 out of 10 people have already attempted to do something in order to offset the rising price of gas. 24 of those 200 people, 12%, responded to the situation by buying a car with better gas mileage.

The Smart Car is something of a phenomena all over the world. It's micro small at 8', 2.5" long, only 5' wide and seats two, but in a city, according to howstuffworks.com, the Smart Car can back right up to the curb instead of parallel parking like other cars. For anyone who has ever spent 40 minutes looking for a parking spot near the high-rise they live the Smart Car and other mico-mini cars would be a blessing.

The Smart Car has a decidely futuristic look, but its almost over-the-top design gives the Smart Car a peculiar styling edge over other cars. It can change its color. Smart Car owners can quickly and easily change the car's exterior color by replacing the recyclable body panels that attach to the steel frame with whatever color they like.

The Smart Car's top speed is 84 mph and it has a unique manual transmission system that doesn't require a clutch. Drivers shift gears by tapping the console mounted shifter. It has the same or more advanced safety features as rival subcompacts.

The big problem with very small, light cars is one of safety in a collision. The Smart Car's solution is a solid steel cage safety shell. It encloses the interior passengers and it forms most of the Smart Car chassis. It has more than held it's own in crash tests conducted by the Insurance Institute for Highway Safety and independent crash tests. It has been designed to receive four stars in crash tests which will be conducted by the government's National Highway Traffic Safety Administration. While admittedly the micro-mini car will never be as an SUV, crash tests done at 70 mph show that the Smart Car will come out of a collision mostly intact when compared to standard subcompact cars.

How much does a Smart Car cost? Base price, $11,590 at smartusa.com.

Sources:

http://www.msnbc.msn.com/id/19030555/

http://www.gm.com/corporate/investor_information/corp_gov/officers.jsp#

http://ask.cars.com/2008/01/new-cars-sold-i.html

http://auto.howstuffworks.com/smart-car.htm

http://www.dailyfueleconomytip.com/

http://www.smartcarofamerica.com/forums/cmps_index.php?id=smart_car_dealerships

http://www.nytimes.com/2007/11/25/automobiles/25MICRO.html?pagewanted=1&_r=1&ref=automobiles

http://blogs.cars.com/kickingtires/2007/01/more_on_smart_c.html

http://ask.cars.com/2008/01/new-cars-sold-i.htmlhttp://www.eia.doe.gov/steo

http://www.autoblog.com/2008/03/25/u-s-smart-fortwo-sales-so-strong-penske-wants-15-000-more/http://www.msnbc.msn.com/id/17878603/