This is Published: March 28, 1999 Daimler's Tiny Smart Car Falters After a Fast Start

SMART cars are struggling to live up to their name. DaimlerChrysler's Micro Compact Car Smart subsidiary has reduced 1999 sales goals to 100,000, from 130,000, and plans to close its factory in Strasbourg, France, for two weeks next month. And in an effort to reach its new goal, Smart has cut prices, added equipment and planned a three-month ad campaign.

''Switzerland is doing better than expected, and Germany is doing well,'' said Hans-Jurg Schar, executive vice president for marketing and sales at Micro Compact Car Smart, ''but we have to really improve in Italy and France.''

This month, Smart added $275 of equipment to the basic car, including seat cushions, a 12-volt plug for accessories, better glass and a hand grip for the passenger. Prices were cut by $900, to a base price in Italy and France of about $9,300.

The microcar -- it is half as long as a Cadillac Seville -- was the dream of Nicholas Hayek, originator of the Swatch watch. He formed the Micro Compact joint venture with Daimler-Benz in 1997, but was forced out last October amid rising development costs and management disagreements.

In terms of marketing, Smart has had two basic problems: a stiff ride and a high price.

''The colors are fresh, and everybody stops to look,'' said Corinne Fleuet, manager of an Avis car rental agency in Paris. Her five-car fleet is rented every weekend -- for about $75 a day -- by curious Parisiens. ''Many of them say they want to buy one,'' she said, ''until they learn the price.''

Mr. Schar concedes that Smart buyers complain about the ''price-value'' relationship, even though many have high incomes and already own one or two cars. ''And in Germany and France the suspension is an issue,'' he said.

The hard ride is a result of changes made to keep the car stable during high-speed lane changes. Sales began in October, and despite criticism of the suspension in the automotive press, Smart reached its 1998 sales goal of 20,000 cars.

But sales slowed in January; in February Smarts were involved in minor but widely publicized accidents on snowy German roads. Avis halted rentals in Germany until the cars were fitted with snow tires.

The news had no effect on sales, Mr. Schar said, but it was another hitch. ''We presumed that drivers would stay away from the accelerator in unstable driving situations,'' said Helmut Wawra, development director for the Smart. But they didn't, so engineers will add a software package, ''Trust Plus,'' that will cut power if the wheels start to slip. Smart already had a stability control that selectively applied the anti-lock brakes to prevent spinouts.

A competitor, Patrick Le Quement, vice president for design at Renault, says the whole idea of a two-seater more expensive than Renault's four-seat Twingo is off base. The Smart, he said in an interview in Renault's in-house magazine, ''Avec,'' this month, is a phenomenon of fashion aimed at those who only want to drive something different. And he quoted the writer Jean Cocteau: ''Nothing goes out of fashion as quickly as fashion.''