Is smaller better for U.S. car consumers?

Roland Jones Business news editor • Profile • E-mail

In America everything, they say, is bigger. But when it comes to automobiles, is the smaller, more fuel-efficient car about to become the next big thing in motoring?

ZAP certainly hopes so.

The Santa Rosa, Calif.,-based manufacturer of electric motor powered bicycles and power-assisted kit cars plans to sell DaimlerChrysler’s Smart Cars — first launched in Europe and now seen on the roads of most European nations and also in Africa, Asia, Canada and Mexico — in the United States, seeing a big niche market for very small cars.

The thinking is, with gasoline prices hitting record highs and traffic in the nation’s major cities becoming increasingly congested, Americans are likely to buy fewer gas-guzzling SUVs and trucks and gravitate toward smaller, more efficient vehicles like the Smart Car — a mere 8 feet, 2 inches long and just over 5 feet tall — according to ZAP’s CEO Steve Schneider.

“The market timing for what we are doing couldn’t be better,” Schneider said. “Fuel prices are at all time highs, and social responsibility about global warming is something that’s more in the mainstream and not a left-wing thing,” he added. “And there’s the issue of our dependency on foreign oil too — all this makes our business plan very timely.”

ZAP’s plan is to sell 15,000 Smart Cars updated to American road standards through its U.S. distribution network of dealers. Schneider said he already has some $2 billion in orders, far exceeding his initial goal of $300 million, and is preparing the 2005 model year Smart Cars — the first it intends to Americanize and offer through its dealer network by September.

DaimlerChrysler halted its plan to bring the tiny car stateside, and so ZAP has worked instead to buy the vehicles from a network of independent European suppliers, updating them for U.S. use to meet American safety and pollution standards. ZAP plans to sell the coupe version of the car for around $21,000 and the convertible for $25,000. In Europe, the Smart Car coupe sells for about $15,000 and the convertible for $18,000.

At about half the size of most mid-size cars, the two-seater, ForTwo Smart Car is powered by a three-cylinder engine and big enough to hold two adult passengers. It does 50 miles to the gallon and has a cruising speed of about 85 miles per hour.

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