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Fuel-efficient Smart Cars turning heads

Tiny vehicles that offer big gas savings attracting U.S. fans

Gargi Chakrabarty, Rocky Mountain News

Published July 21, 2006 at midnight

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ELIZABETH - Hummer, Yukon and Denali are so passé.

Smart Car, Xebra and Obvio are in.

They are small, hip and, above all, save gas rather than guzzle it.

"I love the look of it," says Ken Schultz, 61, an Aurora resident who bought a Smart Car for $27,000 six weeks ago. "Even my wife fell in love with it; she drives it to work when I am not running errands."

More than looks, Schultz loves the two-seater's gas mileage: a whopping 54 miles per gallon.

With prices of crude oil and gasoline hitting record highs, drivers like Schultz are turning away from convention and embracing alternative transport such as Smart Cars, electric cars and flexible-fuel vehicles that can run on gas or ethanol, or a combination of the two.

Growing demand from customers is prompting dealers to sell more of these vehicles, which are imported from Europe, Brazil and China.

It's not clear how many have been sold in the U.S., but indications are they have a fan club here.

A dealership in Elizabeth, east of Castle Rock, has sold 38 Smart Cars since April and is close to making deals on another dozen. The cars are manufactured by DaimlerChrysler and are popular in Europe.

Elizabeth RV and Automotive Center will get a shipment of four electric cars, called Xebra, this week, and customers are already lined up for those vehicles. Manufactured in China, the Xebra is priced at about $11,000. A caveat: It's designed strictly for city driving and can go only about 40 miles on a fully charged battery.

In addition, the dealership is planning to get the Obvio, imported from Brazil. The Obvio, priced from $16,000 to $18,000, can run on either gas or ethanol or any combination of the two. There's also an electric version. (One issue: There are only a dozen ethanol fueling stations in Colorado.)

The Environmental Protection Agency has not approved Obvio sales in the U.S., but the cars likely will be available by the end of 2007.

Smart Cars have a unique look, but their distribution is an issue, said Tim Jackson, president of the Colorado Automobile Dealers Association.

"The challenge for the manufacturer DaimlerChrysler is to work out a system of distribution that sits well in the United States," Jackson said. "For the cars to do well in the U.S., they will have to have a common and reliable distribution and service network."

S.T. Tripathi, owner of Elizabeth RV and Automotive Center, said he receives e-mail inquiries from customers from all over the country. They either want to buy the cars or purchase parts.

A customer in New Mexico, Tripathi said, is so interested in the Xebra that he has promised to drive to the dealership as soon as Tripathi calls him with news of the car's arrival.

"I pray every day that gas hits $10 a gallon, really," Tripathi said. "I look at the big trucks and SUVs sitting on the interstate during rush-hour traffic and wonder why do we need to waste so much gas?"

Schultz doesn't want to waste gas. He keeps his $62,000 Mercedes Benz, $44,000 GMC Denali and $56,000 Corvette convertible in the garage - and zips around town in a Smart Car.

"This is a fun little car," Schultz said. "I have made more friends with this car . . . people take pictures of me driving; even cops have pulled me over to ask about the car."

Tripathi has sold 38 Smart Cars (mostly to baby boomers who are retired or close to it) to buyers from Colorado, South Dakota, Nebraska, Kansas and New Mexico. He began selling the cars in April after the EPA approved sales in the U.S. market. Even the Governor's Office of Energy Management and Conservation has expressed interest in the car, he said.

He is looking to expand the dealership to Colorado Springs and either Denver or Littleton this year.

Tripathi buys the cars from Zap, a distributor in Santa Rosa, Calif. The manufacturer of Smart Cars, DaimlerChrysler, doesn't sell them directly in the U.S. through its authorized dealerships.

Zap buys the cars in the open market from brokers or distributors in countries where they are sold and modifies the cars to comply with American standards. Zap subsequently sells the cars to dealers such as Elizabeth RV and Auto. Zap offers a three-year or 36,000- mile warranty on a Smart Car.

Zap sold 280 Smart Cars in the U.S. this year and plans to sell 600 more, said spokesperson Alex Campbell. Campbell said Zap owns the patents on Xebra, which is manufactured in a Chinese factory under Zap's contract. It also owns a 20 percent stake in the Brazilian manufacturer of Obvio and has sole distribution rights in the U.S., Campbell added.

"The flexible fuel car (such as Obvio) is getting to be a lot more popular," CADA's Jackson says. "There is a demand within the American consumer market to help out the American farmer by sending money to the Midwest cornfields as opposed to the Mideast oil fields."

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