Thirty-seven years ago, SMH ($VTX:UHR) CEO Nicholas Hayek pondered a car that would have the same manufacturing technique and customization features as a Swatch, the watch that he popularized in the 1980s. Called informally as the "Swatchmobile," this car was meant for commuters who lived in cities.
After an agreement with Volkswagen ($XETRA:VOW3) fell through, Hayek launched Smart Car with Daimler AG ($XETRA:DAI), a German multinational automotive corporation known for its Mercedes-Benz brands. "Smart" is an acronym "Swatch Mercedes Art".
Over two decades after Smart rolled its first vehicle off the factory line, Daimler has decided to discontinue the compact urban vehicle in the United States and Canada after only 90 cars were sold in the United States during March.
Smart car may have floundered for Daimler in 2019, but it still has a presence on used-car websites, namely Carvana ($CVNA) and the largest car dealership, Carmax ($KMX).
A decline in inventory
On September 26, 2015, we began tracking Carmax's inventory down to the last SUV. On that date, there were 89 listings for Smart vehicles. Inventory ebbed and flowed with the average over time, but starting in the Spring of 2017, a decline that lasted up until today began with the number of cars sold across Carmax's stores.
That was also the year when Smart announced it would stop selling gasoline-powered vehicles. From 2017 on, Smart sold electric vehicles, but they only offered 58 miles (93 km) of driving range. Compared to the Tesla Model 3, which provides over triple the mileage on a single charge, consumers thought twice about purchasing a Smart car.
As of April 26, there were 33 Smart cars listed for sale on Carmax, which is part of a three-and-a-half year low period for the make.
Meanwhile on Carvana, Smart inventory saw a more drastic decline. On April 28, there were only 8 Smart cars listed on the website. That puts it on par with Porsche, Genesis, Alpha Romeo, Maserati and the like of more rare vehicles in terms of inventory.
The cheapest used car on the market (usually)
How is it that Smart is in the same sentence as a Porsche when it could be left in the dust by a 911 in a quarter-mile drag race? Its price point puts it at the opposite extreme as the most expensive vehicles sold on Carmax and Carvana.
Compared to every other vehicle make on Carmax, Smart was far and away the cheapest on the market (as we have covered before). And for obvious reason; it's an ultra compact two-seater with a tiny engine. Over time across both used car buying platforms, it has remained a relatively cheap used vehicle for purpose.
On Carvana, the average price of a Smart car has actually increased. Granted, there is little inventory, which means there are less "average" cars to throw off the whole inventory. But could this be a sign of these tiny vehicles being collector items? Time will tell if the Smart will be right beside the '64 Impala and the BMW M3 E46.
Where are the Smart cars now?
Besides being personal vehicles, Smart cars are notably part of Car2Go ($PRIVATE:CAR2GO), a German car rental company that is also a subsidiary of Daimler AG. That, of course, makes sense; as a car rental company, using another subsidiary's vehicles — i.e. Mercedes-Benz — would prove to be too expensive, and Car2Go is popular in cities where a Smart car could be effective.
That's also why the New York Police Department uses Smart vehicles in the city. Able to move through traffic jams, the NYPD uses the FourTwo as a replacement for scooters... And also makes them the subject of "clown car" jokes among residents.
But now, the Smart car joins the Ford Crown Victoria as a police vehicle that will be used beyond its commercial run. Is it a testament to its craftmanship? Possibly. And it's not like the brand is gone forever; Smart still sees plenty of success in Asia, where it will build a new factory in China for its next generation of Smart vehicles. In 2022, four decades after Hayek first came up with his city car vision, the Swatch Mercedes Art lives on in Asia and around the world, yet in North America, it will only be a phantom of what the future of city transportation was once considered to be.
