Mercedes-Benz boss Jurgen Hubbert unveiled the new Smart Tridion4, the 5dr four-seater from the makers of the world's smallest passenger car. A production version is expected in 2004.

Prof Hubbert said his intention had been to carry Mercedes' tradition of high technology and safety into Smart but the investment needed was under-estimated.

“We set out to work in completely new fields developing vehicles which we knew would create a completely new market,” he said.

“Some of the conceptual ideas were too much for both us and our customers, but despite the criticisms and the difficulties, I am glad we persevered with the development of Smart.”

DaimlerChrysler expects Smart to become the fastest-growing marque in the UK over the next two years. It hopes new derivatives will increase sales from 1,000 units in 2000 to 5,000-6,000 this year, 10,000 in 2002 and 20,000 in 2003.

The 365cm Tridion4 has a steel safety cell and plastic body. The backs of the white-leather front seats can be folded down towards the front to turn the rear bench seat into a lounging sofa.

The centre console includes navigation graphics, TV, DVD and a sound system.

Smart also introduced its Hyper-drive Concept, a combination of diesel engine and electric motor, with a start-stop system to help save fuel.

Walter Scherg, Smart UK general manager, said: “We see ourselves being the fastest-growing manufacturer in the UK over the next few years.”

Much of the growth should come with the launch of the right-hand drive coupe and cabrio later this year followed by the launch of the 80mpg, 799cc commonrail injection diesel late next year. The roadster coupe is scheduled for 2003.