Smart USA, the maker of the pint-sized fortwo 2-seater, is betting the new Cash-for-Clunkers program can kick-start sales.
Like the rest of the industry, Smart has been hit hard by the recession, a situation compounded by the decline from last year’s record fuel prices. With fuel prices were racing towards their $4-a-gallon peak, sales of the little fortwo soared well past the company’s original forecast of 15,000 to 20,000 a year. But since then, they have fallen sharply. For the year-to-date, Smart is down 25%, and June volume plunged a whopping 56%, compared to the same month last year.
With fuel prices again on the rise, and with Congress finally approving the so-called “clunkers” legislation, Smart officials are hoping they can reverse that decline. Because of the fortwo’s mileage rating, buyers who trade in a qualifying used vehicle should get the full $4,500 government incentive. To further enhance the brand’s appeal, Smart has set aside a special batch of fortwo models, reducing their price to $13,335, including delivery charges.
“We think it will be a strong seller,” said David Schembri, president of Smart USA.