There is no denying that purchasing the smart brand of cars from the Swiss company that procuded Swatch watches has been an absolute disaster for Daimler. Few automotive brands have had so little success and survived. It is time for Daimler to stop keeping this brand afloat. It has been time to dismantle or preferably sell the brand for some time now, yet Daimler smart keeps the brand on life support.
The idea was attractive in 1994 when Daimler (then Mercedes Benz) decided to acquire the company. A fun, urban runabout that could be easily customized. In a sense, the car would be a fashion accessory – similar Swatch brand watches. It was an ambitious project. The joint venture had a complicated management structure and planned to make the production a point of differentiation whereby suppliers would be largely responsible for designing major parts of the cars and would have to install the parts in the assembly plant. The initial hopes for a hybrid powertrain did not come to fruition due to the associated costs and complexity. The projects’ cost overruns and internal squabbles resulted in the Germans taking complete control. By all accounts, the project has been a financial disaster and losses are estimated at over €100 million annually. Models have been limited to mostly different versions of what is now called the Fortwo. The cars never garnered enthusiasm in the marketplace or automotive press. With fewer than 100,000 annual worldwide sales, smart remains a niche player. Penske Automotive Group decided to sell its US franchise back to Mercedes-Benz USA in February 2011.
Unfortunately, the brand soldiers on. Ahead of the 2012 Paris Auto Show, the company released images of a new concept vehicle the forstars. Clearly a concept car, it will be powered by the existing electric motor used in the fortwo. If past history is any guide, Daimler will commit more resources in the forms of R&D and advertising to the brand in the hope of creating a profitable business. Past history would also suggest this to be a futile effort.
Courtesy: Daimler Benz AG
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