Penske to sell upto 25,000 Smart cars in U.S.

By Jui Chakravorty

DETROIT, Oct 25 (Reuters) - Penske Automotive (PAG.N: Quote, Profile, Research, Stock Buzz) Group expects to sell up to 25,000 two-seat Smart cars in the United States next year, as the dealership chain remains on track to launch the car in the first quarter of 2008.

Penske Automotive Chairman and Chief Executive Roger Penske said on a Thursday conference call the retailer had 35,400 reservations for the Smart car, produced by the Mercedes division of German automaker Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz).

"We currently expect to sell between 20,000 and 25,000 vehicles in 2008," Penske said on the call.

Sales and service will be handled by Smart USA, a division of the Penske Automotive Group, which is distributing the car in North America.

"We've had tremendous interest in this vehicle," Penske said. He added that there is capacity to make 130,000 to 140,000 cars annually, but the retailer is only making cars after taking orders for them.

The basic Smart car will start at $11,590, while the convertible's base price would be $16,590, Penske said. The first cars will be in U.S. showrooms in December.

Penske said customers, when reconfirming their order, are asking for more options than the company had originally expected.

"People are buying a car with more content," Penske said. "In fact, the reconfirmation reservation is adding another $1,000 (to their order)."