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TITANS OUT, TINY IN: EX-HUMMER LOT TO SELL FORTWOS

Dealer calls switch coincidence; observers call it savvy move

As titans of the road, large sport utility vehicles control the highways, dominating smaller cars and rolling over obstacles in luxurious, cocooned comfort.

But this week, the littlest of cars usurped a giant.


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  • Tuesday, a week after it took the Hummer nameplate off the marquee of its West Sahara Avenue dealership, Towbin Automotive Enterprises rolled out the smart fortwo, a tiny, two-seat coupe made in France by Daimler-Benz.

    Chalk up the switch to coincidence, said Dan Towbin, chairman of Towbin Automotive Enterprises. Towbin began negotiating the smart fortwo deal eight months before its launch. He considered multiple locations for the dealership, but the end of the Hummer agreement made the Sahara store the perfect spot for selling the fortwo.

    Even if accidental, the trade mirrors a broader trend, as consumers desperate for fuel savings abandon SUVs and snap up gasoline misers. Sales of large SUVs fell 42 percent through the middle of 2008, according to automakers, and General Motors said in June it would close four pickup and SUV factories in North America and consider selling its Hummer unit. Sales of small cars, on the other hand, jumped nearly 11 percent through the summer.

    Towbin, who'd been selling new Hummers since 1993, said fuel economics played a role in the decision to stop selling the SUVs.

    "With the change of the business environment with regard to segments such as large SUVs, the business model was frankly not profitable enough to continue on with," he said. "With the unusually high fixed costs unique to this particular dealership regarding size, retail goods and branded goods, it was built for much larger volumes affected by obvious changes that came about due to gas prices and other buying patterns."

    One auto expert lauded the dealership change.

    John O'Dell, senior editor of the Edmunds Green Car Advisor, said Towbin's changeover from the biggest to the smallest car on the road ranks as the most radical sales shift he's heard of, but trends make the exchange a good idea.

    "GM made a pretty emphatic statement that they would like to get rid of Hummer," O'Dell said. "A dealer who has that franchise has to wonder what that means to him. They look around and see declining sales of Hummers. Then they look at the smart franchise and see that it's selling pretty much everything it can get its hands on. It's kind of a no-brainer."

    Smart is selling everything it can get its hands on and then some.

    The company allotted 30,000 fortwo cars annually for export to the United States, and U.S. consumers have placed more than 60,000 of the cars on order.

    Credit much of the demand to the fortwo's fuel economy and affordability, Towbin said. The fortwo gets 33 miles per gallon in the city and 41 miles per gallon on the highway, with a starting price of $11,590. Extras include convertible tops and $1,200 body-panel kits that allow owners to swap out colors depending on the season or their mood. And though it's small -- less than nine feet long -- Daimler-Benz built the fortwo to Mercedes-Benz safety standards, complete with air bags, steel reinforcements around the cabin and the highest ratings for crashworthiness from the Insurance Institute for Highway Safety.

    For Towbin, it's been a long road to selling the smart fortwo. He saw his first smart car in Paris about 15 years ago.

    "I thought it was the coolest thing I'd ever seen," he said. "Even though it was small, it looked substantial and well-put-together. It looked like a fun car. It made me smile."

    But Towbin had to fight with 1,800 other dealers nationwide to win one of just 67 U.S. smart dealerships. The agreement calls for him to deliver the fortwo to buyers in Nevada, south Utah, eastern California and northern Arizona.

    Towbin hasn't delivered any fortwos yet, partly because the dealership is just two days old, and partly because of the company's unusual sales model. Buyers can visit the dealer to test the cars, but they must order fortwos online, with a $99 refundable deposit, at smartusa.com. Only after they've ordered does a dealer reach out to them to close a contract. Towbin's just beginning to contact buyers now. Based on global sales numbers, roughly 30 percent of buyers won't close the deal. Those orphan cars will be available to walk-in buyers.

    The smart fortwo probably won't replace SUVs, Towbin said. He sees room for both in many garages: Households might hang on to their SUVs for family outings and use the fortwo to commute to and from work, or to make quick runs to the neighborhood grocery store.

    Towbin will also sell Rolls-Royces, Bentleys and scooters from Vespa and Piaggio at the former Hummer site.

    With gasoline prices dropping back below $4 a gallon, the fortwo remains a short-term gamble, O'Dell said. He sees motorists "in marginal neighborhoods" driving new Ford F150 pickup trucks and Chevrolet Silverado SUVs, because rebates of $7,000 to $10,000 make the fuel bills a little easier to swallow these days.

    Still, he expects long-term trends to favor cars such as the fortwo.

    "The upshot is, we're always going to be paying a little more for gas than we were the same time last year," O'Dell said. "The average we pay every year is going to go up. I think there's a place for Hummers and other vehicles like it, but not as mass-market cars. (Towbin) probably made a good decision."

    Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

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    Naysayers wrote on September 24, 2008 02:29 PM: I read nothing but venom from these comment boards. Hummer's too big...this car's too small...boohoo! LVRJ should dump these comment boards since most remarks come from whiners who can find nothing worthwhile to say.


    Horseman wrote on September 19, 2008 08:38 AM: $3,000? Show me a car with anti lock brakes, traction control, corner brake assist, four air bags, keyless entry, top marks for crash worthiness, and the quality of Mercedes Benz for $3,000. This is not a Yugo. I own one and it is a QUALITY vehicle. You pay for quality.


    The Car SUCKS! wrote on September 18, 2008 05:29 PM: $11,590 is WAY, WAY too much to pay for this piece of sh*t car. It is worth only about $3,000 or less. Fits a midget with a budget. Hummer's will use this piece of sh*t car as a roller skate.


    TOWBIN wrote on September 18, 2008 05:26 PM: Towbin sucks!!!


    Fleecer Jr wrote on September 18, 2008 04:38 PM: I drove by this place today. His lot if FULL of used Hummers - ha! ha! All Towbin stores are jokes.


    Fleeecer Jones wrote on September 18, 2008 04:36 PM: As usual, Towbin is a day late and dollar short. Gas has dropped down to about $3.50 a gallon. His lot will be stuffed with these stupid little cars just like it was with Hummers. A poor operator.


    Bill Heard wrote on September 18, 2008 04:32 PM: Dan Towbin could not fit into a smart car. Either could his jerk son 'the chopper'.


    M.andretti wrote on September 18, 2008 10:52 AM: Mrstacy: Hummer owners have always been saps,now that gnawing realization has smacked them in the forehead. BWAAAHAAAHAAAAAAAAAAA. What a bunch of maroons. I could write checks for plenty of them, what's the point? They appeal to persons of arrested development,"look its just like my TONKA TOY I had" they think . Good riddance. What contraption will the marketeers come up with next? I need something or someone to be judgemental about!


    George wrote on September 18, 2008 10:36 AM: Actually, Common Sense, the Yaris is 35 mpg on the highway and the Fit is 34. You can check it out at autos.yahoo.com.

    So, the Smart is better than both.


    rjC wrote on September 18, 2008 08:39 AM: Now all Dan has to do is get rid of his Bozo ripoff artist thug of a wanna be gangsta son at the Auto mall. The punk personna appeals to the easily influenced who will buy an already too pricey ride at a high, then higher interest rate after the sale BS!


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