Tuesday, December 13, 2005

Does the smart car have a future?

December 13, 2005
by Mathieu St-Pierre , Auto123.com
The smart fortwo has been on the Canadian market for less than 18 months and it has not sold as well as DaimlerChrysler, smart's parent company, would have liked. Worse, global sales have not been very good either. In fact, since its inception, smart has never turned a profitable dollar or Euro for that matter. Since 1998, and because of smart, DCX has lost EUR2.6bn and 2005 is looking like another lost cause even if they sell more cars than last year.
2005 has been tough. Two models were flushed: the Roadster and the formore SUV. Financial losses are estimated at EUR600m. The forfour 4-seater is not catching on as well as the fortwo and smart's entry into the American market is still very doubtful.
At the moment, smart is undergoing a EUR1.1bn restructuring process with the goal to make the car company profitable by 2007. By the same year, the next-generation fortwo will be launched and the most recent plans also include the introduction of the smart in the US.
There are two opinions amongst industry analysts: do it and don't do it, move into the US market that is. The success of the next generation fortwo will have much to do with the decision of whether DCX will invest in a second-generation forfour.
DaimlerChrysler is working on merging certain aspects of the smart's development process with Mercedes. With hopes of keeping costs down and interest up, smart is working hard to make 2007 the year of the 180-degree turn-around.
Let us hope they can do it.

View source here.

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