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Smart Car

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Smart Car
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Case 10-2)
1

The Smart Car
In 1991, Nicolas Hayek, chairman of Swatch, announced an agreement with Volkswagen to develop a battery-powered
"Swatch car." At the time, Hayek said his goal was to build
"an ecologically inoffensive, highquality city car for two people" that would sell for about $6,400. The Swatchmobile concept was based on Hayek's conviction that consumers become emotionally attached to cars just as they do to watches. Like the Swatch, the Swatchmobile (officially named "Smart") was

designed to be affordable, durable, and stylish. Early on,
Hayek noted that safety would be another key selling point, declaring, "This car will have the crash security of a
Mercedes." Composite exterior panels mounted on a cage like body frame would allow owners to change colors by switching panels. Further, Hayek envisioned a car that emitted almost no pollutants, thanks to its electric engine. The car would also be capable of gasolinepowered operation, using a highly efficient, miniaturized engine capable of achieving speeds of 80 miles per hour. Hayek predicted that worldwide sales would reach one million units, with the United States accounting for about half the market.

Some observers attributed the hoopla surrounding the
Swatchmobile concept to Hayek's charismatic personality. His automotive vision was dismissed as being overly optimistic; less ambitious attempts at extending the Swatch brand name to new categories, including a brightly colored unisex clothing line, had flopped. Other products such as Swatch telephones, pagers, and sunglasses also met with lukewarm consumer acceptance.
The Swatchmobile represented Hayek's attempt to pioneer a completely new market segment. Industry observers warned, moreover, that the Swatch name could be hurt i f the Smart car were plagued by recall or safety problems.
In 1993, the alliance with Volkswagen was dissolved;
Hayek claimed it was because of disagreement on the concept of the

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