DaimlerChyrsler hopes U.S. drivers get Smart

DETROIT — DaimlerChrysler AG Chief Executive Dieter Zetsche on Wednesday will announce plans to sell the company’s popular and culturally hip micro Smart car in the U.S. starting next year, a company official told The Associated Press.

Zetsche is scheduled to meet with reporters Wednesday morning to make the announcement at the Detroit Athletic Club, the company source said Tuesday on condition of anonymity because the information had not been officially released.

Zetsche, who personally oversees the company’s Mercedes Car Group, of which Smart GmbH is part of, had said repeatedly this year that a decision on whether to sell the two-seat car — which measures less than 9 feet long from bumper to bumper — would come by the end of June.

The decision is a watershed moment for Smart, which has never posted a profit since it was formed in 1998, and could likely help generate new revenue for the ailing Mercedes group, which has dragged down the company’s overall earnings as it restructures and reemphasizes its focus on quality.

Company officials at the German-American automaker were mum about the details of the expected announcement, but conceded that with gas prices in the U.S. hovering above $3 a gallon in many places, the Smart fortwo could appeal to buyers looking to save money.

According to DaimlerChrysler specs, the fortwo can get up to 46 mpg in city driving and as much as 69 mpg on the highway, but its speed is not like its Mercedes counterpart. The two-seater is powered only by a three-cylinder gasoline engine. A diesel variant is available in Europe.

Other automakers have also begun selling small, sporty small cars, including Toyota Corp., which has the Yaris and Honda Co.’s Fit.

Smart launched the fortwo in Canada in 2004 and last year it sold about 4,000 models, or twice what it had initially forecast.

Last year worldwide, Smart sold 143,000 cars, up from the 139,000 it sold in 2004. It produced a total of 124,300 cars in the same period, down from 152,100 the previous year.

In March, the German-American automaker said it would spend nearly 1 billion euros on restructuring Smart, cut 300 of the 750 jobs at the unit’s Boeblingen headquarters and end production of its larger, four-seater forfour model.

In 2005, Daimler spent another 1.1 billion euros to restructure the unit and cut some 600 jobs in Germany and France. In that drive, it ended production of its two-seat Roadster model.

Zetsche, however, is a fan of the car, despite the fact that some shareholders have called for Smart to be closed or cut loose.

“The Smart is an ideal entry-level brand for all age groups. And it’s certainly not a bad thing that a bit of the little Smart’s appeal carries over to DaimlerChrysler as a whole,” Zetsche said.