Last week the German giant announced the recall of almost one in three of the Mercedes cars built in the past four years, including 58,000 vehicles in the UK. One day later, executives produced an £820m restructuring programme for the Smart brand which will see its roadster model scrapped at the end of this year and its project to develop an SUV abandoned.
Instead, it will concentrate on a successor to its ForTwo city car, continue cooperation with Mitsubishi on the ForFour to improve its profitability and introduce measures to cut fixed costs by 30% over the next two years. Since its launch in 1998, the Smart brand has lost £1.8bn.
“The new business model aims to put the small-car brand on to a financially sound basis, with the goal of breaking even in 2007,” says its statement.
A spokeswoman for Smart says the shop-in-shop concept, whereby the brand is incorporated inside or added beside a Mercedes-Benz showroom, will continue in the UK. She would not be drawn on whether the vision of DaimlerChrysler UK president and CEO Wilfred Steffen to see Smart in standalone showrooms here within the next few years would be pursued.
However, DC’s announcement states that “additional sales and marketing potential will be explored”.