Last Updated 20 Apr 2022

Smart Cars – Competitive Advantage

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The Smart Car was launched in 2006 in the United States with vision of making it a popular brand among lower and middle-income group. The product aimed at being an environment friendly battery operated car for two people that was affordable, durable, and stylish. The car offered gasoline powered operation in addition to the battery-operated engine. This was to ease driving in case of battery failure or some other crisis. Among other features the car offered a highly efficient miniaturized engine that was capable of achieving 80 miles per hour speed.

The low cost of manufacturing offered greater earning potential for the company and Nicholas Hayek, the chairman of Swatch and the brain behind the entire concept visualized extensive sales scope. The low cost car with features those were comparable to the high-end luxury cars in terms of security, speed, and ease of driving. These are the competitive advantage that the Daimler’s new launch by the name of Smart cars offers to its consumers. US Market for Smart Cars The Smart Cars introduced by the Daimler a year back in the United States has triggered great interest among the prospective consumers.

The fuel economy is one factor that has created interest amongst the public. The company hopes to attract the consumers on two grounds:

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  • Prospective consumers who have high regards for environment
  • Prospective consumers who want to own the latest trendy model in town With increasing gas prices in the US, this may be the right time to present the fuel-efficient car. Speculations are high and the company is looking forward to create a market niche in the rich and educated consumer base of America.

It has already secured orders close to 90% of its production capacity and is hopeful of making a big success in the coming years. The consumers though are a little apprehensive about its security features and the stability of the vehicle. The initial reaction to the vehicle’s launch in Europe in the year 1998 was similar. The sales were poor due to concerns regarding the vehicle’s stability. The small size of the vehicle made it a subject of joke among most people. But the times proved the substance of the vehicle and its success story was repeated in United Kingdom and other countries of Europe.

The car will find similar acceptance in the market of United States mainly due to its fuel economy. With rising prices of gasoline consumers will be happy to opt for a low cost trendy car that is battery operated. Other target markets for Smart Cars Besides United States and European countries the Smart Cars will make a distinct impression in the markets of developing countries like India, China, Latin America, and Mexico. The factors that are most relevant for these growing markets are enumerated below:

  • Large population base in countries like India and China offering greater market potential.
  • The attractive pricing of the Smart Car – budget car that can be afforded by most people in the middle-income group.
  • Suitable for high traffic and narrow roads.
  • Higher cost of fuel will attract the consumers to opt for low fuel cost alternatives

These factors will trigger market demand for such cars and Smart Cars can create a meaningful and profitable presence in these countries.


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Smart Cars – Competitive Advantage essay

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