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DCX eyes U.S for smart car May 9, 2001 Mini car can park easily, fit in pickups, but profits and sales are a tougher fit

NEW YORK (CNNfn) - DaimlerChrysler is looking at bringing its micro car, the smart brand car, to a U.S. market that has increasingly moved to purchases of trucks and vans over cars.The smart car is a two-passenger vehicle just over 8 feet long and just under 5 feet wide that can be carried in the box of many pick-ups on U.S. roads today.

The smart car, a two passenger vehicle that DaimlerChrysler is looking at bringing to the U.S. market in 2003, would be the smallest car in the U.S. market. (Source: smart)

At only 1,587 pounds, it would be the lightest car ever allowed on the road by the National Highway Traffic Safety Administration, assuming it passed the test. The lightest vehicle now on the road is the Honda Insight, an electric/gasoline hybrid vehicle that weighs 1,868 pounds, or 17 percent more.

Officials with DaimlerChrysler said they will be studying the introduction of the vehicle to the U.S. market over the rest of the year, and that a roll-out in dealer showrooms here probably wouldn't happen until the middle of 2003 at the earliest.

"I think the chances are good," said Simone Maier, spokeswoman for smart. "But nothing has been decided. The studies are ongoing."

The move is ironic in light of DaimlerChrysler's recent decision to start marketing its Unimog multi-purpose vehicle through its Freightliner truck division to some niche consumers. That would make it the largest non-commercial vehicles on U.S. roads. Unimog is nearly twice as tall as a smart car and is more than two feet wider. In fact the smart car's length is only 14 inches longer than Unimog's width.

Maier admits that the car would not pass U.S. crash safety standards in its current configuration and that some additional engineering would have to be done. But she said she's confident the price would stay close to its current 10,000, or $8,849 basic list price.

The price, and the fuel economy of about 49 miles per gallon, as well as the ability to easily park on crowded U.S. streets are seen as selling points. The car is short enough to pull into a parking spot with its nose flush to the curb and not stick out into traffic on some streets.

The company saw sales of the smart car climb by about a quarter last year to 102,100 from 79,900 in 1999. But the car, introduced to the European market in 1998 and to Japan last year, has been unable to make money for DaimlerChrysler, despite the high fuel prices and narrow streets in those markets.

One analyst said it would have an even tougher time finding a market on U.S. roads dominated by larger vehicles. The car is only 61 inches tall, which would put its roof below the hood of the Ford Excursion, the largest sport/utility vehicle on the market.

"It's doesn't hurt to speculate on bringing it to the U.S. market, but I don't think there's a chance they'll do it," said Stephen Reitman, analyst for Merrill Lynch in London. "I would put it in the failure camp. Commercially, financially, its didn't fulfill the hopes the company has had for it."

Reitman estimates the division is losing about 350 million or 400 million a year on the smart brand, although DaimlerChrysler has never separated it out from the Mercedes results.

The model has had trouble finding a dealer network in Europe. Maier said that DaimlerChrysler would likely turn to Mercedes dealers in the United States to sell the vehicle here, but she couldn't say if the more numerous Chrysler or Dodge dealers would also be tapped to sell the vehicle.

She also said the company is likely to start sales in the more crowded markets on the east and west coasts. She said one of the things being studied this year is which markets are the best fit for the car and which buyers are the best to target.

(Source: Cable News Network. A Time Warner Company.)
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