Daimler launches new version of tiny Smart car

 

Associated Press

Germany's Daimler AG unveiled a new version of its tiny, two-seat Smart model Wednesday in hopes the car won't just get admiring glances with its unusual design — but make a bigger contribution to profits as well.

Daimler CEO Dieter Zetsche and Smart division head Annette Winkler introduced the new Smart Fortwo at Berlin's Tempodrom event center.

The new version is the same length as its predecessor at only 2.7 meters, or 8 feet 10 inches, and keeps its two-tone color scheme. It is slightly wider with a somewhat different silhouette; the new model has a short front hood where the old model had none, the front end sloping directly down from the windshield.

The company says the new Smart — the third version, and the first since 2007 — has stronger business prospects because it shares many parts with Daimler partner Renault's Twingo. That should mean lower costs per vehicle due to higher purchasing volumes for parts.

The car, first sold in 1998, was conceived as stylish, high-tech urban transport. So small it can be parked nose-in to the curb in crowded European cities, the Fortwo had advanced features such as a turbocharged engine, computer-controlled gearbox, stability control and a safety cell that shielded the occupants in case of an accident.

Yet those features raised costs, while the lack of back seats limited demand among some consumers. A four-seat Forfour version bore little resemblance to the chic Fortwo, missed out on reflected cachet, and was cancelled. But on Wednesday, the Fourfour was brought back, this time with a recognizable resemblance to the Fortwo.

Daimler doesn't break out separate earnings for Smart, which is part of its Mercedes division. The company said in a statement Wednesday that "even today, we are earning money with every Smart sold" and that cooperation on the new models with partner Renault means "we are going to achieve a significantly improved business case."

Analysts at Sanford C. Bernstein last year listed the original Smart among the top 10 lossmaking cars of modern times in Europe, saying the first version cost Daimler 3.35 billion euros, or about $4.53 billion at today's exchange rate, in losses over its model cycle. At the time, they said "we're not convinced the current one makes money either."

The new model "is a very, very important step," said Ferdinand Dudenhoeffer, director of the CAR-Center Automotive Research at the University of Duisburg-Essen. "Now they have the chance to make Smart profitable... If this attempt does not work, nothing will."

Tim Urquhart, principal analyst at IHS Automotive, said the common platform improves the car's chances of commercial success. "They're basically getting three vehicles for the price of one," he said. "You're looking at huge improvements in economies of scale, a huge improvement in purchasing components, for example. All of that would point to a much more viable proposition than it was previously."

He added, "if this doesn't work, the future for the brand will not be looking very good."

Urquhart forecast that by 2016, Daimler could sell 206,000 Smart models. That compares to 98,000 Smart Fortwos sold last year, a decline of 7 percent.

The cars will go on sale in November in Europe and next year in the United States.

Read more Breaking News - Business stories from the Miami Herald

  •  
FILE - In this photo taken May 13, 2009, file photo, Family Dollar CEO Howard Levine poses for a photo at the company's headquarters in Matthews, N.C. Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion, the companies announced Monday, July 28, 2014. Family Dollar Chairman and CEO Levine will continue to head Family Dollar and will report to Dollar Tree CEO Bob Sasser. Dollar Tree will continue to run its stores under the Deals, Dollar Tree and Dollar Tree Canada brands. It will keep the Family Dollar brand, as well.

    Dollar Tree steps up fight, buys Family Dollar

    The fight for penny pinchers is intensifying.

  • Medicare hospital fund to last 4 years longer

    Medicare's finances are looking brighter, the government said Monday. The program's giant hospital trust fund won't be exhausted until 2030 — four years later than last year's estimate.

  •  
In this May 22, 2014, photo, empty train cars, front, sit in a yard after having their loads of coal unloaded at Norfolk Southern's Lamberts Point coal terminal in Norfolk, Va. As the Obama administration weans the U.S. off dirty fuels blamed for global warming, energy companies have been sending more of America’s unwanted energy leftovers to other parts of the world. It’s a global shell game on fossil fuels that at the very least makes the U.S. appear to be making more progress on global warming than it actually is, because it shifts some of the pollution, and the burden for cleaning it up, onto another country’s balance sheet.

    Not in my backyard: US sending dirty coal abroad

    Coal from Appalachia rumbles into this port city, 150 railroad cars at a time, bound for the belly of the massive cargo ship Prime Lily. The ship soon sets sail for South America, its 80,000 tons of coal destined for power plants and factories, an export of American energy — and pollution.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category