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DaimlerChrysler rethinks Smart brand

Thursday, March 17, 2005 Updated at 12:16 PM EST

Reuters

FRANKFURT - DaimlerChrysler is taking a close look at how to save
money on its four-seat Smart ForFour model as a way to halt losses at
the Smart mini-car brand, Mercedes Car Group chief Eckhard Cordes told
a magazine.

Losses at the Smart business were "simply unacceptable," Cordes said in
an interview with British magazine Car, but he reiterated that they
would not close down the brand because Smart has a youthful image and
promising products.

"We must stop throwing good money after bad. I want to see some kind of
profit and I won't wait forever," Cordes said. "We need to take money
out of the ForFour, we may not do the ForMore [SUV], we may have to
find a new partner, and create a revised business model and
distribution network."

Cordes has frozen development of new products at Smart pending the
outcome of a strategic review due next month.

Asked if the company's strategy for its super-luxury Maybach brand was
also under revision, he said: "Maybach does not worry me at all. That's
a small numbers issue. But like Smart, Maybach needs to be brought more
into the Mercedes-Benz fold. The sooner, the better."

The Mercedes Car Group includes Mercedes-Benz, Smart and Maybach.

DaimlerChrysler has previously said it would not rule out finding a
partner for Smart, and that itlikely would not build the ForMore.

Smart now sees an updated version of its two-seat mini-car due in late
2007, as a potential candidate for entering the United States.

PSA Peugeot Citroen chief executive Jean-Martin Folz told German paper
Automobilwoche that the French car maker could not imagine co-operating
with DaimlerChrysler on Smart cars.

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