U.S. sales of Daimler's Smart brand minicar plummet

Daimler’s two-year effort to win over U.S. drivers with a thrifty, plastic-clad minicar is running out of steam, adding urgency to the German automaker’s effort to find a partner for the Smart brand.

The U.S. debut of the urban two-seater is foundering after a promising start in 2008, when North American sales propelled Smart to its first profit. With just one model, the ForTwo, the brand’s U.S. sales plunge 41 percent, to 14,600 cars, last year, more than the 15 percent decline by Daimler’s Mercedes-Benz.

“Smart’s not a car in the traditional sense. It’s a high-style alternative to public transportation,” said Jim Hall, principal of consulting firm 2953 Analytics who has worked with General Motors and Toyota on model development. “The problem for Smart is that fashion tends to be fleeting.”

Smart’s fading fortunes in the United States highlight Daimler’s need to find a partner to expand the model lineup and lower costs as it commits $2 billion to boost compact-car offerings. The manufacturer is in talks with Renault and other carmakers on potential “close-knit” cooperation, chief executive Dieter Zetsche said Dec. 17.

“The lack of success in small cars has been a big strategic weakness, and Daimler likely needs a partner to turn things around,” said Stefan Bratzel, director of the automotive institute at the University of Applied Sciences in Bergisch Gladbach, Germany.

Washington Post