BLOG: RICHARD JOHNSON

Electric is 'the Smart way' to grow in Canada and U.S.

A Smart Fortwo Cabrio Electic Drive car is recharged at the 2017 Geneva auto show. Photo credit: REUTERS
Richard Johnson is print editor of Automotive News.

When Smart announced that it would sell only electric vehicles in the U.S. and Canada some wags wondered whether it was the beginning of a broader retreat for the brand. After all, this is not exactly the golden age of microcars.

At a time when gas is cheap and looks like it will stay cheap, can Smart really hope to grow?

On this delicate question, Smart CEO Annette Winkler paused for a moment.

"I have to focus," she says, "because I have 10 arguments in my mind for why we will grow."

"The most important," she continues, "is that I am pretty sure there is a downsizing trend in the industry, particularly for cars -- speaking globally. And just look at the number of people who want a big car, but say, 'let's have a second or third car.'

"Plus the number of cities with lack of space is still increasing, especially in China where there are 150 cities with 1 million people. If you see all this and then see where we are‎ -- that is the answer."

Smart's strategy is to focus on these big, bustling metropolises. In the U.S., she says the brand is doing well in San Francisco, Los Angeles, San Diego and, more recently, in Miami.

Winkler: "Smart can grow ..." Photo credit: BLOOMBERG

"Smart can grow, it can grow in the Smart cities we are focusing on," Winkler said. "We had an all-time [global] sales record last year [145,000 units]."

But the EV-only decision in North American did seem to prompt speculation about Smart's future.

"Really? No. It's not true at all," she says. "The people driving the Smart are challenging the status quo and are very open to alternative drives. If I have ‎to continuously support [internal] combustion and electric this costs much more than if I focus on one much more. So I focus on the one more customers will adopt and will like."

Indeed, Winkler says Smart already has an EV-only reputation in some countries.

"Many people believe -- particularly in new markets -- that Smart is only a brand for electric drive. People who don't know the brand say that is certainly an electric car."

Still, she says there are no plans "for the moment" to extend the EV-only strategy to other parts of the world.

"There are many people who love the combustion vehicle. The take rates with the Brabus [tuner] version are at an all-time high."

But in the U.S., she said the microcar segment "is so small that it is better to focus."

You can reach Richard Johnson at rjohnson@crain.com

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