Professor Elam

In her post about the Logan, Michelle wishes that the Smart Car would come to America. Well Michelle, your wish is granted!  Yep, Smart Car  is coming to the USA.  It will first be sold in California.  But did you know that it has been a money loser for its maker, Mercedes?  Read Jerry Flint’s comments  on the Smart Car and his evaluation at this link. 

So why has Daimler lost money on the car?  Flint says that there was no a study ahead of time and that break even is 200,000 vehicles and no two seater has ever sold 200,000 vehicles world wide per year.  This observation handily ties into what we are studying in Chapter 6 in the cost class about break even predictions.  I think part of the problem is that  it is built in high cost Germany by Mercedes, perhaps it should be built in Poland at a much lower cost, that might work. 

One saying is that everything old is new again or there is nothing new under the sun.  Did you know this idea has been tried 50 years ago in the US and failed?  Yep the Isetta  was marketed by would you believe, BMW, in the 1950s.  It would never have passed a safety test as the whole front side  was the front door!  Gas was only 35 cents a gallon then and sales were low.  However it did make some money for BMW in Europe.

DLE