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June 20, 2017 01:00 AM

Even at home in Europe, Smart struggles for sales

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    One Smart advantage? The ability to park perpendicular to the street.

    Although Smart celebrated in September its 2 millionth car built since it debuted in 1998, the Daimler subsidiary has struggled even in its home market of Europe. Its volumes remain roughly half those of BMW's small-car brand Mini.

    Demand tends to remain strong only in crowded metropolitan areas like Rome, Paris and Barcelona, where the advantages of a diminutive vehicle like the ForTwo coupe are apparent with its miniature turning radius and ability to park perpendicular to the street.

    Attempts to create a broader brand identity independent of its original two-seater have flopped in the past. Production of a roadster and four-seater were discontinued only two years after their respective launches and plans for a small SUV were shelved over a decade ago to stanch heavy losses.

    After posting combined charges of 2.06 billion euros ($2.24 billion) in 2005 and 2006 to restructure Smart, CEO Dieter Zetsche said the only viable business case for a third-generation ForTwo and a resurrected ForFour entailed a partnership with Renault, forming the genesis of Daimler's later strategic alliance with Renault-Nissan.

    Even though new-car registrations for Smart rose 11 percent last year in the European Union to 102,400 vehicles thanks to the launch of its popular soft-top For-Two, they slid 8.2 percent this year through April, during which market share edged lower to 0.6 percent.

    Smart chief Annette Winkler has quashed speculation of a small crossover, and with the European launch of the electric drive in the ForTwo and ForFour this month, its growth focus has firmly shifted. Instead of chasing raw sales volumes with new model derivatives, she plans to limit financial risks by adopting a more asset-light business model, generating added revenue from new app-based services such as its "ready to drop" in-car parcel delivery and "ready to share" private car-sharing.

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