20 Comments

1. The company will stay the course on the smart car and slowly build some sales. They have developed a new car which will be introduced in 2007. They recently got a new credit line and a warning to stay listed. They have made mention of a reverse stock split but with that type of credit line they will probably just support the 1.00 stock price. With that type of credit line they company can’t be denied and can ramp up fast if it wants. Investor sentiment may be changing now and they are slowly introducing new product.

    

   Editor: Glad to see it rebounded, but don’t trust the management.

   Comment by Rich Balcer — 1/30/2006 @ 8:01 pm

2. I still do not understand how Mercedes and now the “Obvio Corp.” seem to be obsessed with building a rear engine car-the smart and the Obvio are not the Porsche Boxster. Driving a smart in a cross wind is like driving an old VW Microbus! Ford & Fiat are collaborating on a 120″ long- tall- 4 seat mini with a 3 cyl gas or diesel motor equipped with an available cvt transmission which should be a worthy competitor for the smart-not to mention the myriad other cars in the class that are much less expensive and more practical, and get the same mileage. Mercedes still has a disaster on its hands with smart-they have already written off 1.5 Billion USD on the car- & reportedly lose $5,000 on each car. In the UK they now have special Zero % financing, One year of free insurance or buy a cabriolet for $ 1,000 more than a coupe. I was at the smart factory in June and was amazed by the number of cars on hand. October 2005 sales for smart are down 18.5% over last year. The brand is only up 3% year to date even with the new, Mitsubishi chassis based smart forFour and Mitsubishi has just revised their Dutch plant production where the forFour is built downward by 10,000 to 120,000 total. It will be interesting to see how this story plays out. I’ll bet that Mercedes could have put that 1.5 billion to better use in it’s own product line rather than spend it on smart . Sort of like throwing paper money on a raging fire.

    

   Editor: John, while this is all very interesting and informative, it really doesn’t apply to the purpose of this forum. The BLOG is here to simply discuss the potential of ZP. In my view, discussing the potential of ZP is a waste of everyone’s time and energy. The company had its window of opportunity, and it slammed shut. As a stock, as far as I am concerned, it’s over. The whole thing was probably a bit of a scam on investors. My suspicions are that they knew they couldn’t get the cars, yet they went and publicized the order flow ad nauseum. There stock went up, they raised money and probably dumped like crazy. I haven’t looked at the tables, so I can’t say for sure.

    

   Your comments are appreciated, but ZP is over with. If circumstances change as far as that particular company is concerned, I will look at it again.

   Comment by John P. Hedin — 11/8/2005 @ 10:12 pm

3. I understand that ZAP is suing everyone in sight-including the millionaire entrepeuner Thomas Heidemann-(the Prof. Harold Hill of smart) and current (?) Zap board member, as well as Zap’s Registered Importer- G&K Automotive (the company that actually developed the mysterious “smart technology” that Daimler Chrysler so badly wants. What a soap opera! Now, if they could only get the EPA to pass the 700 cc car- they might be able to sell a few before it is replaced by the new 1000 CC car coming in 2007. I bet ZAP is planning to morph the smart car into the new OBVIO-and then equip it with the new pioneering ROTOBLOC engine! what a story-the stock should soar to at least $10.00 a share.With the 500 Million $$ that they will get from winning the law suit their future is secure. The preceding story was fictional-just say “I believe in Santa Claus-the Tooth Fairy and Steve Schneider”.

    

   Editor: There not much more to say about this one. It’s over.

   Comment by John P. Hedin — 11/2/2005 @ 7:21 pm

4. ZP is making a move right now. Up almost 15% from .82 to .99 Here’s the news just out that is fueling the upturn: ZAP Files Legal Action Against DaimlerChrysler and Affiliated Companies ZAP’s Suit Relates to Converting and Marketing Daimler’s ‘’Smart Car'’ in the U.S. Transportation pioneer ZAP (ZP) announced today that the Company will be proceeding with legal action against DaimlerChrysler (DCX) and affiliated companies and individuals, serving a complaint that seeks in excess of $500 million in redress for a more than year-long campaign of misconduct perpetrated against ZAP by Daimler and Ulrich Walker, the then-CEO of its subsidiary Smart gmbh. This might get interesting.

    

   Editor: But then again, it might not. Just another stunt to get the stock trading in my view, but perhaps something can come of it. If you want the stock to trade, the best way to do it is to deliver sales and earnings.

   Comment by Joseph Makley — 11/1/2005 @ 11:03 am

5. Wait until “OBVIO” finds out that the nice folks at Zap are used car salesman who really don’t know anything about cars– do you think Zap can consult with OBVIO on things like certification when they were only involved in marketing the “smart” car-and what a great job of marketing the 60 MPG $25,000 non US compliant 2005 smart car they have done! How did Dorothy feel when she found out that the Wizard of Oz was just a scared little man pulling strings. Now that Zap has closed under $1.00 again-what is the real value of a marketing company with no R&D, and whose only profits come from a used car lot! A word to the wise should be sufficient-

    

   Editor: I can’t help but agree with you at this point. My suspicions are that the whole Smart Car thing was a big promotion to get their stock trading up- they must have had an idea they would not be able to fill the orders, yet they still went on promoting the order flow they were receiving. This is a stock I would avoid and/or sell for a tax loss.

   Comment by John P. Hedin — 10/9/2005 @ 11:29 pm

6. Here’s more info. They will have protypes ready by the end of the year. ZAP Signs Exclusive Agreement for OBVIO!(TM) Urban Cars of Rio de Janeiro Wednesday September 21, 4:26 pm ET California Company Projects Brasilian Car Available for Export to the U.S. by 2007 SANTA ROSA, Calif.–(BUSINESS WIRE)–Sept. 21, 2005–Transportation pioneer ZAP (PCX:ZP - News) announced today that it has signed an agreement for the exclusive North American distribution of a new urban car from Brasil with OBVIO! Automotoveiculos S.P.E. Ltda., of Rio de Janeiro. ADVERTISEMENT ZAP and OBVIO! have agreed to collaborate in the design and manufacture of high efficiency, high performance urban cars. OBVIO! intends to manufacture two models for export to the USA. ZAP will work closely with OBVIO! to ensure these advanced technology vehicles are fully compliant with United States regulatory requirements and will serve as the exclusive representative and distributor for OBVIO! in North America. ZAP and OBVIO! expect to unveil the prototypes in the U.S. by the end of 2005. Initial plans are to roll out the vehicles in 2007. Under the terms of the agreement, ZAP is ordering 50,000 vehicles from OBVIO! during the three year period following initial delivery. Given the level of interest ZAP continues to receive from its dealer network coupled with the “greening” of the American market, the partners see growing market demand for fuel efficient cars. According to the Wall Street Journal, the potential market for small, fuel-efficient cars could be as high as one million vehicles per year. “Over two million cars a year are manufactured in Brasil,” said ZAP Chairman Gary Starr. “We are pleased that OBVIO! has chosen ZAP to be the first U.S. distributor of cars designed and made in Rio de Janeiro. We believe the OBVIO! is part of a new generation of automobiles that address rising energy costs.” ZAP and OBVIO! intend to deliver urban cars with a uniquely fresh design that achieve high levels of passenger safety, performance, fuel efficiency and sophistication. The two models — an economy and a performance version — would include a number of exciting advances in design, features and options. “ZAP and OBVIO! share a lot in common in bringing change to the global automotive industry,” said ZAP CEO Steve Schneider. “Fuel prices are on the rise and whether they go back down or level off, I think consumers today clearly demand more environmentally friendly vehicles. Unlike the Smart Car, having the manufacturer direct relationship with OBVIO! simplifies the importation process and the consumer benefits.” ZAP’s business plan is to develop a distribution network that caters to buyers of fuel-efficient and advanced technology automobiles. ZAP is working to create an auto dealer package that will market automobiles from companies like OBVIO!. Schneider noted that ZAP plans to offer new advances in automotive technology, including high efficiency internal combustion and electrically driven vehicles. “OBVIO! has spent several months investigating the right partner for the U.S. market,” said Ricardo Machado. “We concluded that ZAP was uniquely positioned to be able to successfully market our cars and we look forward to bringing these refreshing new automotive designs to North American consumers. ZAP recently secured a $425 million credit facility and their experience in delivering alternative vehicles to the marketplace has shown that ZAP is capable of selling and servicing the dealer and customer that is motivated to purchase advanced transportation vehicles. We believe that with the backing and support of the manufacturer, ZAP will be very successful in this history making venture.” About OBVIO! OBVIO! Automotoveiculos S.P.E. Ltda. is a new developer and manufacturer of automobiles in Rio de Janeiro, Brasil. OBVIO! has assembled a network of suppliers to incorporate the latest advances in automotive engineering into a new generation of automobile that meets the challenges of today’s urban driving environment and is in the process of setting up its manufacturing facility in Xerem at Duque de Caxias city, Rio de Janeiro. Under the direction of OBVIO!’s chief design partner, Anisio Campos, the premier car designer in Brasil and a former racing driver, OBVIO! cars will incorporate many state-of-the-art technologies in its materials and features for an urban car that is fun to drive, but meets consumer’s growing preference for efficiency. For more information, visit http://www.obvio.ind.br.

    

   Editor: Maybe they will be able to get this one through the DOT and get orders for the car. Then you will have something. This press release could be construed as an admission that they are out of the Smart Car business.

   Comment by Frank Brown — 9/21/2005 @ 3:44 pm

7. ZP has lined up over 400M credit recently, Any comment from you? Does it mean ZP is close to offer Smart Car very soon in large amount, Is there any interview plan with Steven in near future?

    

   Editor: There is only one event that could get me to publish on ZAP again- that would be an announcement specifying where they are going to get the cars they have orders for. I believe the company made some major blunders in the process of trying to obtain cars, and the negative backlash is too hard to overcome. I read the 8k on the credit facility, and it doesn’t specify what it is for. It could be sales contracts for electric cars- I don’t know. There has been no public disclosure concerning if or where they are going to get cars, and until there is I don’t believe this stock has any upside.

   Comment by Michaele Liu — 9/18/2005 @ 8:13 am

8. Is there any hope left for zp ( new stock symbol) With gas prices so high, I would have thought it would spark new interest in there electric bikes.

    

   Editor: There is plenty of hope for them to be a mediocre electric vehicle distributor. As far as being in the Smart Car business, it doesn’t appear as if it is going to happen on any sort of mass scale. Not enough to make this stock a worthwhile investment.

   Comment by John Fordam — 9/10/2005 @ 8:58 pm

9. smart math 101 4 years ago smart city coupe’s were selling in Europe pre tax at from the equivalent of $7,000 base to $11,500 for a diesel Cabriolet plus a 1,000 Euro rebate. Add $3,500 for conversion costs and $750 shipping. Of course the Euro/Dollar ratio went crazy, but Mercedes is selling the base diesel (60 + MPG) at $15,500 USD. Zap is quoting $25,000 to $29,000 for prior model year cars (2002) The car just isn’t worth more than $17,000 MAX

    

   Editor: I haven’t confirmed these numbers, but I will post them for everyone to see.

   Comment by John P. Hedin — 6/8/2005 @ 8:23 pm

10. These are not REAL orders with customers waiting for a car-they are merely open ended commitments on the dealers part to buy a certain number of cars over a period of time without buyers or customer deposits in hand. Steve says they now have 2 BILLION in dealer commitments-that would be 162,000 cars-or 1.5 years total production. I understand that dealer commitments are for 100-150 cars-so how many dealers has ZAP gotten franchise from-I can’t believe that 1,000 dealers could be so loose with money-Mini has 82 dealers in the US.

     

    Editor: The numbers do seem overwhelming. I guess if you think in terms of percentages, if a small percentage of the orders they have actually fill, it has a huge impact on the company. To me, it’s all about simply getting the cars to sell. The market has sure turned around on this one.

    Comment by John P. Hedin — 6/8/2005 @ 8:14 pm

11. How can Zap survive with their conversion of the Smart Car now, if the manufacuter of the base car says they will never to business with them? I feel they will either have to sell the technology to MB, giving up the orders they currently have, or face the demise of their company. It was a terrible political move, but understandable for a company that is somewhat idealistic in its videw of the world. I feel that MB is completely playing this one out for their own benefit and to force Zap to come crawling to them, technology in hand. Horrible. ml

     

    Editor: That is one possibility I really hadn’t considered. I just thought MB was PO’d at ZAP for making the order so public when they are already under a lot of heat in that division.

    Comment by ml — 6/7/2005 @ 6:03 am

12. Wow! I can’t believe this one. I bought this at $1.60 and am seriously down so far today. 15 minutes to go and over a third of my initial investment is gone. I didn’t even see any news today that would have prompted this drop. I also say, get the cars from other distributors and get to work guys.

     

    Editor: What can I say- the MB $1 billion order has turned into a disaster for the company. They simply blew it. From here, all they can do is sell cars to re establish credibility.

    Comment by Tim Haddon — 6/6/2005 @ 11:48 am

13. Latest Automotive News op/ed piece on smart is titled “smart move-keep smart out of US” and quotes Bill McKinnon an Australian auto writer-”A very mediocre drive. Noisy. Rough. Hard work. Trans is a shocker. Poor handling, steering and braking. Hates rough roads. Expensive. Restricted rear vision. Substandard fit, finish and materials quality inside”. Big surprise NO SPARE TIRE & NO OIL DRAIN PLUG

     

    Editor: No wonder the Smart division of MB is struggling. So-  how did they get all the orders?

    Comment by John P. Hedin — 6/5/2005 @ 10:08 pm

14. Why would ZAP need 4 Dealer territories in Reno at $50,000 each unless this was a play to take the money and run. Zap is only a MARKETING co., and had nothing to do with certification of the car. The new mark 7 has been for sale for 2 years in Europe but not yet Certified. Just How many 2+ year old cars are sitting on dealer lots in Europe just waiting for Zap to come and buy them all up ??

     

    Editor: We will find out. Apparently, the market currently shares your point of view.

    Comment by John P. Hedin — 6/5/2005 @ 10:00 pm

15. Zap has only received certification for approx. 300 PRE 2003 model year smart for Two GASOLINE powered cars. Mercedes Benz is importing the DIESEL powered car into Canada at prices starting at $15,500 USD. The GASOLINE smart is EPA rated 37 MPG both city and highway. Canada DIESEL 51 CITY/62 HWY

     

    Editor: Other approvals on later models are coming I am told.

    Comment by John P. Hedin — 6/5/2005 @ 9:49 pm

16. Wow! I originally started looking at this company back in October, simply because it was the only company in the States that was planning on selling the Smartcar. I believe that oil prices will continue to climb long-term, which would make the demand for more fuel efficient vehicles skyrocket. If MB is pressuring Zap, then I am sorry for MB. You are right, Zap should deliver what it can as fast as it can to shake off the nay-sayers, and walk away from MB. I have only been a shareholder of any stock since January. Zap was the reason I started my account. I am now diversified into 12 different companies with a very small portfolio, mostly centering on energy technology, oil, gas, and gold. Just playing, I guess, but I am holding out for the long-haul.

     

    Editor: Then keep your fingers crossed that they will find a way to get cars and get them sold while this window of opportunity exists.

    Comment by Jeffri Smith — 6/1/2005 @ 9:54 pm

17. Please note that one key question you asked: “what would prevent Mercedes Benz from Americanizing the car themselves and benefiting from the groundwork that you’ve laid?” was never answered, and appeared to be avoided, by Steve Schneider .

     

    Editor: There was follow up, but the real answer is nothing would prevent them from doing. Just some regulatory hurdles.

    Comment by Jerry — 6/1/2005 @ 7:11 pm

18. My objections will probably get lost in the avalanche of conflicts of interest on this and other Zap promoting sites, but I am so angry at the poor preparation Zap has made for the launching of thi svehicle, and the easy lobs that pass for hard hitting questions that I cannot be silent any longer. If I can find a better avenue for enumerating the following points, I will. 1. The Smart Car, in its Americanized version gets somethin like 37mpg, not 60mpg as originally claimed, according to the government testers. To be fair, Zap has stopped promoting the 60mpg figure, but hasn’t addressed the discrepency forcefully enough, in my opinion. 2. Zp is not available to buy in five states, including the two with the largest urban concentrations in the country - California and New York. This is clearly a big problem given the appeal to space and gas conscious consumers. In my personal conversation with a representative of the company, I was assured this is pending, but it is not here now and it may be 2 or more months off, according to my contact. 3. There has been a flood of insider selling on the night of May 29, just about the time the bad news broke about the order not being honored by MB or Smart gbh. This is not only a bad sign; it is potentialy a matter the SEC might be interested in. 4. The potential output of 15,000 cars/year sounds good until you consider the 76,000 plus backlog. Will people really be willing to wait 76,000/15,000 = 5+ years for their car, even assuming no more orders? 5. There is practically nothing available on the financials of this company. On Fidelity’s site, it says “For the FY ended 12/31/04, revenues fell 18% to $4.8M. Net loss applicable to Common totalled $29.4M, up from $5.5M. Revenues reflect a slow-down in orders for the water seascooters. Net loss reflects higher consulting, non-cash stock based employee expenses & professional fees.” That is not encouraging, is it? And some of the promotional fees went to THIS site apparently. 6. Without manufacturer support, how will the dealers get the parts and training to service this car? Who will honor the waranty? 7. The interview didn’t cover the very real possibility that MB is unwilling to extend credit to Zap and the dealers it works with to buy these cars; maybe *that* is the real reason the order has been unfulfilled? A billion dollar order is a big gamble on any company, but especially one with negative EPS and increasing losses. I bought Zap thinking it was marketing a great little car and that MB was missing a real market here in the U.S. I still believe that, but there are just too many risks to allow me to keep my money in Zap and I have sold my 1,000 shares, taking the loss.

     

    1. Who cares about the mileage figures if they have the orders.

    2.Who cares about the five states if they have the orders in the other 45 states.

    3. My figures show roughly 200,000 sold in May- not by insiders buy by investors, which is a big difference.

    4. I don’t know if people will be willing to wait.

    5. Trailing financials are terrible- this one is not a value play if you own it- it’s a bet on the future.

    6. That’s a lot of noise for 1,000 shares, but that’s the reason we have this forum. So you can put your ideas out there. I don’t disagree with them all, and certainly there is considerable risk here.

     

    Comment by Scott Baker — 6/1/2005 @ 6:50 pm

19. Thanks for updating us on ZAP. It seems to me that they are somewhat of a Junior player by making up a PO to MB prior to knowing whether or not they would even respond, or by not having a backup strategy in place so they could move ahead as quickly as possible. I would think that time is of the essence for them assuming they have the capital to proceed with a Plan B. Given all this and your interview with the CEO of ZAP, realistically when do you think they could commence selling this vehicle assuming MB is out of the picture, or is this a dead horse

     

    Editor: I believe your observation about putting a back up strategy in place immediately is a good one. They should be proceeding now with rolling out the 15,000 annually they said they could deliver. I wish I had asked that question.

    Comment by Marvin Groberman — 6/1/2005 @ 12:44 pm

20. I apprecitate Steve Schneider participating in the interview. It seems as though the powerful organization, (MB), is applying pressure on a young company with a brilliant technology. I feel that MB would be much more interested in just obtaining the technology ZAP has created. When they asked for Zaps engineering to provide information, it seems it was really just an attempt to gather information. It was wise of Zap to instead provide proof of concept, through the delivery of the car in Nevada. It appears MB is now applying pressure on Zap, by not accepting the purchase order. If it can succeed in doing so, then it can try to buy the company, or that portion of it, and make more money itself. It seems unlikely that MB would want to share the profits with Zap, if it doesn’t have to. It is very important, that Zap gain some political power, in order to maintain it’s autonomy, and thive. It is clear they have a great product. No one is going to ignore this. But it is vulnerable to larger more powerful companies using their political acumen to force Zap to give the technology to them. I hope Steve and Zap will talk to other politcal players, who have gone up against this type of situation themselves, for help. Maybe even those outside of the auto industry. They need leverage against MB. m_L

     

    Editor: I believe they should just move forward with distributors and get going on delivering the 15,000 cars annually Schneider says they can deliver right now. That equates to about $20 million in gross profits - not bad for this little company. The best leverage you have is the ability to walk away from a deal. If they implement, they are in that position.

    Comment by ml — 6/1/2005 @ 9:48 am

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