Berlin – 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.
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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.
I wouldn’t even sit in any nazi drech german car.
Just because it’s German doesn’t mean it’s Nazi.
commish I totally agree with you…or wear any german made or fabric clothes
The car u-r driving if not made in the USA may have german-nazis parts .Most European models have g-n components.
In an era full of Chinese garbage Germany produces a high quality item in almost every category.Why pay double since the Chinese product often self-destructs and then one goes out to by a better replacement.
My parents were Holocaust survivors and lost numerous family members.They suggested to me years ago to differentiate between
the manufacturer and the item they make.
The world knows that if it’s made in Germany it will last a long time.
It’s no mitzvah to have aggravation and financial loss when it could be avoided. And also continuing to boyctt german products is nonsignificant to their robust economy.Unfortuneately they make the best products which most americans can no longer afford because of the euro exchange rate against the dollar and the high cost of the item to begin with.Their standard of living is higher than America’s.
I understand your concerns but bad experiences with the garbage
sold from china have caused me to differentiate between the maker and the item.And perhaps the money from my meager purchases
goes into the fund for reparations.