California Autos Examiner

Saturday, March 25, 2006

smart forfour No More

I had just finished knocking the forfour as uninspiring in my podcast when lo and behold it appears that smart is axing the model ASAP. I had thought that the contract with Mitsubishi would have prevented this and the press release (below) does state that the cancellation of the forfour is "still subject to negotiations to be carried out with MMC and all other partners" but I'm sure a few Euros will help ease Mitsubishi's pain. This really thins the herd for smart as the fortwo is the last remaining model. With the chopping of 300 workers and full integration of smart into the Mercedes fold the costs to operate the division will be far cheaper. I predict that the fortwo will spawn several variations to help fill those smart dealerships. I also think that the complete streamlining of the lineup increases the chances of the fortwo coming to the USA.


Focusing on the smart fortwo

New smart fortwo to be
launched in 2007

Cancellation of production of smart forfour intended,
subject to negotiations with Mitsubishi Motors Corporation (MMC) and other
partners

Focusing on the smart fortwo

New smart fortwo to be launched in 2007

Cancellation of production of smart forfour intended, subject to negotiations with Mitsubishi Motors Corporation (MMC) and other partners

Sustainable profitability confirmed

Stuttgart, Mar 25, 2006
DaimlerChrysler AG is planning to focus on the smart fortwo to ensure the long-term sustainability of its smart brand. Thus, the profitability of smart will be confirmed, with positive results expected from 2007 onward.
The planned measures for a further enhancement of the business modell of smart include the following items:

The clear focus on the smart fortwo;
the intention to cancel production of the smart forfour;
the manifestation of smart and especially the smart fortwo as a long-term and important part of DaimlerChrysler’s product portfolio;
as well as the complete integration of smart into the Mercedes organization.
Overall, these measures are likely to result in a headcount reduction of 300 employees at smart in Böblingen. The smart forfour is produced by MMC through its wholly-owned subsidiary Netherlands Car B.V. (Nedcar) in Born, Netherlands. The cancellation of the forfour production is still subject to negotiations to be carried out with MMC and all other partners.

The measures described above are still subject to approval by both the Board of Management and the Supervisory Board of DaimlerChrysler AG. The cost for DaimlerChrysler related to these measures are estimated to be in the magnitude of approximately €1 billion.

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