smart May Be Riding High in Canada but Sales Suffering in Europe

smart Two-Seater to be Sold in U.S. by California's ZAP

While a novelty in Canada, where DaimlerChrysler's diminutive smart fortwo (lowercase intended) has been making tiny waves

A dock worker, dressed to match the unique red and black checkered paint scheme of the smart fortwo, poses beside the car as Canadian specification coupes and cabriolets arrive at a Halifax port on September 24, 2004. (Photo: DaimlerChrysler Canada)

among the nation's trendsetters since its September launch, Europeans haven't been buying enough of the two-seat, rear-engine runabouts to make the brand profitable.

And that's after six years of sales, and an almost cult-like following in major European metropolitan centers such as London, Rome, Paris and Munich. Where parking is at a minimum and fuel costs make Canada's sub-dollar per liter gasoline seem bargain basement low, the smart fortwo with its 3.9 L/100 km (72 mpg) city and 3.1 L/100 km (91 mpg) highway fuel economy rating makes sense.

smart added spice to the lineup with the addition of a stylish roadster in 2003

Mercedes-Benz Canada opened the first smart showroom in North America at Mercedes-Benz Midtown in Toronto. (Photo: DaimlerChrysler Canada)

and the new forfour sedan in September, and for the most part sales are starting to escalate with October experiencing the brand's best global sales results ever, with 15,200 units delivered for a 44 percent improvement compared to the same time last year. In total, smart has sold 113,400 cars this year, mostly in Europe, Japan, Taiwan and now Canada.

If sales continue to grow then profits should follow, but so far the brand has only been a drain on its parent, DaimlerChrysler. smart was to break even this year, yet the opposite has occurred and losses have grown deeper.