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DaimlerChrysler Retooling Smart

2 April 2005

Smartfourfour

DaimlerChrysler is restructuring, not scuttling, its money-losing smart business unit.

The new model, which involves major organizational and product changes, aims to put the city-car brand onto a financially sound basis, with the goal of breaking even in 2007.

Among the proposed changes:

  • The intensified development of the successor to the smart fortwo, including fulfilling the requirements for the U.S. market. The next generation of the three-cylinder gasoline engine will also be used by other manufacturers, with resulting economies of scale that will substantially improve the cost position of this engine project.

  • Cooperation with Mitsubishi Motors on the smart forfour will be continued. Measures to be taken to improve profitability mean that this product will break even in the future.

  • The production of the smart roadster will be terminated at the end of 2005.

  • The smart SUV project will be discontinued.

  • Key tasks in development, sales, procurement, after sales and service will be integrated into the respective areas of Mercedes-Benz Passenger Cars.

  • Additional sales and market potential will be explored. For example, to boost unit sales, the number of smart outlets in the Mercedes-Benz sales organization will be increased by about 25% using the shop-in-shop concept.

  Plans to sell smart cars in the United States are on hold.

Overall, DaimlerChrysler assumes that the restructuring expenses incurred in 2005 will total up to €1.2 billion ($1.56 billion). This figure includes exceptional write-downs on plant and equipment, the settlement of obligations to third parties, and other adjustments. The program also includes significant layoffs.

The substantial exceptional expenses in connection with the new smart business model will drag down DaimlerChrysler’s earnings forecast for 2005. Excluding the exceptional charge from smart, DaimlerChrysler, after a weaker first and second quarter, still expects a slightly higher operating profit for full year 2005 compared to 2004.

April 2, 2005 in City car | Permalink | Comments (9) | TrackBack (0)

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Comments

It's a money losing unit, though that might indeed be caused by loosing too much money.

D’oh! You’d think I could type and spell by now. Thanks. Edited.

They should reconsider putting the smart cars on hold in the United States, a small hybrid built by could easily cut into the MINI's sales especially when aligned with Mercedes, glamourous and enviromentally concious are not mutually exclusive.

If they were smart (pun intended) they would understand that developing a line of Smart cars is crucial for their future success. Demand for oil continues to surge and now that US corporations control a major portion of the middle eastern supply we can expect oil to top $100 a barrel by year end. Smart cars are fast becoming a necessity. Chrysler may miss the boat on this one, and if so, they may well end up bankrupt.

Went to Europe and first saw these little things and wondered when they would come to the US. I've been following the story as it progresses I guess, but this is the first time I've heard about them having second thoughts. They should definately bring them over, especially as gas prices in the US start continuing the european trend.

How does this affect Zap {http://www.zapworld.com/}? They sell a version of the Samrt car.

JUST CAME BACK FROM ITALY, I KNEW THEY ALSO HAD SMALL CARS EVEN 30 YEARS AGO, BUT BOY ARE THE AMERICANS BEHIND... I'VE ALWAYS DEFENDED AGAINST ANTI AMERICAN GREED STATEMENTS... BUT THEY MAY BE ON TO SOMETHING WHILE OTHER COUNTRIES ARE GIVING UP COMFORT TO CONSERVE ENERGY, WE AMERICANS ARE DRIVING AROUND IN YUKONS AND HUMMERS EVEN IN WARM CLIMATES.. I SAW SMART CARS BY MERCEDES, BMW, AUDI, HONDA AND EVEN FORD...?????HOW ABOUT THIS IN THE BUSY CITIES LIKE FLORENCE AND ROME WITH ALL THAT CRAZY DRIVING NEVER HEARD ONE HORN BEEP AND NEVER SAW AN ACCIDENT.... FOUND OUT HORN BLOWING WENT AWAY YEARS AGO AFTER FINE WERE GIVEN OUT, THEY USE TO BLOWN HORNS MORE THAN IN NEW YORK CITY.... ARE AMERICANS RETRAINABLE?????

Americans retrainable?
I seriously doubt it.
Particularily the religeous Freaks,that believe in that jesus Fairy Tale.
Those are the type that encourage their kids to become murders,Looters,Rapists and torture experts,joining the military and civil Goon Squads.
If your son or daughter gets killed at this activety,YOU and only YOU bear most of the responsibility!!

hi,

i am from pakistan
i want to buy the mini car

please send me detail;s

thanking you

regards
rafia

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