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

Obviously Gentz believes that the problem is critical, or he wouldn't have timed it so poorly. DaimlerChrysler is currently trying

A temporary exhibit presenting a sculpture created out of car backseats is on display at Place des Arts in Montreal. Over 12 feet tall, the sculpture metaphorically asks visitors: who needs backseats? (Photo: DaimlerChrysler Canada)

to drum up support from U.S. Mercedes-Benz dealers, readying them for the launch of the forfour and formore SUV in 2006.

According to a Detroit News report, new smart boss Ulrich Walker sent out a memo to his employees just after Gentz made his statement to assure their job security, stating that no plans had been made to sell off or shut down the division.

"Smart still isn't making money -- that's true," Walker said in his letter. "But

Although not making any money currently, smart boss Ulrich Walker has assured that the brands existence is not in question. (Photo: DaimlerChrysler Canada)

its existence is not in question. Juergen Schrempp (DCX CEO) and Eckhard Cordes (Mercedes boss) made that clear to me yesterday."

Walker considers the problems short term, attributing them to lackluster sales the brand's home market of Germany, plus higher than average sales and marketing costs.

While this might be true, Walker is definitely under the gun to produce results. With a new breakeven line being drawn at year 2006, he has his work cut out for him. Therefore his statement to his employees read, "It's self-evident that we have to look at all possibilities to make Smart profitable".