DaimlerChrysler's Smart Brand Stays the Executioner's Axe

Compact formore SUV and Roadster Dropped but fortwo and forfour Stay

California's honeymoon with DaimlerChrysler's entry-level smart division (lowercase intentional) is just getting started,

With every day that passes, smart loses more and more money. They have racked up a total of 2.6 billion euros (4.1 billion CAD; 3.3 billion USD) in losses since the brand was launched in 1998. (Photo: Shawn Pisio, American Auto Press)

via alternative energy purveyor ZAP, with the cute little fortwo subcompact that charms everyone who sets eyes on it. But tiny A-segment cars are not selling as well as they used to in its home European market, which has caused those at the upper echelons of the automaker's management to openly consider axing the entire brand (see automotive news for Feb 24, 2005: Industry Report: DaimlerChrysler to Shut Down smart?).

With every day that passes, smart loses more and more money. It seems that the brand's death-clock is ticking, but the demise of the world's smallest and quirkiest mass production cars may be put on hold, thanks to a new business plan announced in Stuttgart.

The primary goal of the plan is for the smart brand to break even in 2007. While one might think that producing economical vehicles would be a profitable business model in this day and age, smart has yet to post a positive financial report. Last year, the brand lost over

The smart formore, which was intended for the U.S. market, has been canned outright. (Photo: DaimlerChrysler)

600 million euros (773 million USD), and has racked up a total of 2.6 billion euros (3.3 billion USD) in losses since the brand was launched in 1998. With cash-strapped DaimlerChrysler in control, many wonder why such a plan wasn't implemented earlier.

With the plan's proposal comes the announcement that the formore compact SUV, the vehicle which was supposed to launch the smart brand in the U.S., has been canned outright. The development costs of the internal components, such as the all-wheel drivetrain as well as other exclusive parts would most likely outweigh the income from the formore's sales, which would exist as a lone model in a niche market.