Wednesday, January 31, 2007

Smart car says owner loyalty behind sales optimism

MADRID, Jan 31 (Reuters) - DaimlerChrysler sounded an optimistic note on sales and profits for its new Smart brand car as journalists began test driving the re-designed two-seater for the first time. Smart head Ulrich Walker said he would not be draw[n] on sales predictions, but he was confident existing owners' loyalty would provide a key base for the new ForTwo as the division aims finally to break even this year."In a second generation we have these customers in the bank, and we will also get new customers in the future. This is the basis of our volume planning," Walker told journalists on the sidelines of the car's media test drive late on Tuesday. The Smart ForTwo car was a totally new concept when it was launched in 1998 but still sold 770,000, Walker pointed out. The division has lost money since the brand's launch, but after the new model goes on sale in April, Walker expects the minicar business to be in profit by the beginning of 2008. "We will reach break even on operating profit by the end of 2007," Walker said, reiterating previous comments. DaimlerChrysler CEO Dieter Zetsche has made profitability at Smart one of his top priorities, slashing material costs for the new ForTwo by 12 percent and the time to build it by a fifth.

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