4 April 2005

Smart has escaped the axe, but DaimlerChrysler has announced a raft of sweeping changes to its struggling brand. The aim is to haul it into profitability after more than eight years of operation.

Key among these measures is the axing of the two-seat Roadster and Roadster-Coupé models. Both cars will cease production at the end of 2005 after just three years on sale. DaimlerChrysler claims this will help Smart reduce fixed costs by up to 30 per cent by the end of 2007.

In further developments, Smart has confirmed its Toyota RAV4-rivalling Formore off-roader, revealed in official sketches last year (right), will not go ahead as planned. Instead, Smart will accelerate the development of the second-generation Fortwo city car, due to be sold in America after a positive response to the existing model at January’s Detroit Motor Show.

Smart also says the revised three-cylinder petrol engine destined for the new Fortwo will be used by other car makers, hinting at a yet-to-be-revealed joint venture. Despite disappointing sales, Smart’s new Forfour will remain in the line-up. However, DC says measures are being taken to help boost the Forfour’s profitability.

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In all, Smart hopes to increase earnings by up to $600m (£320m) annually by the end of 2007, achieved by further integrating sales, procurement, after-sales and service into the Mercedes-Benz network. Smart also hopes to boost its coverage by increasing the number of sales outlets in existing Mercedes dealerships by up to 25 per cent.

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