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DaimlerChrysler chief Dieter Zetsche introduced the car in Detroit yesterday.
DaimlerChrysler chief Dieter Zetsche introduced the car in Detroit yesterday. (Bill Pugliano/ Getty Images)

Smallest economy car yet heads for US market

Pushing the economy-car frontier, DaimlerChrysler AG plans in early 2008 to sell a two-seat minicar in the United States, making available a vehicle that may be only slightly longer than some Hummers are wide, gets 40 miles per gallon, and will cost less than $15,000.

Just over 8 feet long and under 5 feet wide, with a top speed of 84 miles per hour, the SmartForTwo will be targeted at urban dwellers and commuters . The car's size makes it fuel efficient and easy to fit into tight parking spaces.

While the SmartForTwo is sold in more than 30 countries -- including France and Germany -- it may be a hard sell in the United States. Many American drivers have been reluctant to embrace small vehicles, because of either safety concerns or their allegiance to sport utility vehicles.

The car will easily be ``the smallest modern car" in the United States, said Joe Phillippi , president of AutoTrends Consulting in Short Hills, N.J.

DaimlerChrysler has sold 750,000 SmartForTwo models worldwide since 1998. In the United States, industry analyst Erich Merkle predicted, 15,000 to 20,000 of the cars will be sold here annually, far less than popular models like the Honda Civic, which has yearly sales of about 300,000.

``It's really going to be a niche-type product relegated to large cities on the East Coast and West Coast," said Merkle , director of forecasting for IRN Inc. , an automotive industry consulting firm in Grand Rapids, Mich.

``You're going to buy it because it's a little unique, a little funky, and you want to stand out," he said.

But a little funky may be too much for other parts of the country.

``People out here in Michigan would laugh at this thing," Merkle said. ``They'd show up in parades with clowns in them."

Nevertheless, DaimlerChrysler's US debut of the Smart brand may be shrewd , he said, similar to when Toyota launched its edgy Scion line to counter a ``stodgy" image among young consumers, Merkle said .

The vehicle's US debut has long been rumored and the subject of recent media reports, but until yesterday, DaimlerChrysler chairman Dieter Zetsche had not disclosed the company's plans.

A crop of small, fuel-efficient vehicles has recently been introduced to the US market, including the Toyota Yaris and the Honda Fit. Unlike the SmartForTwo, most are large enough to seat at least five .

The current version of the SmartForTwo weighs just 1,610 pounds, less than half the average weight of new cars sold in the United States in 2004. The company plans to sell a new generation of the vehicle here, though it has not specified how the car will differ .

DaimlerChrysler says the SmartForTwo is safe, despite its lack of heft.

The car has been engineered with high safety standards, a spokeswoman, Bettina Singhartinger said in an e-mail.

She said safety features include three layers of reinforced steel at all strategic points, full-size driver and passenger airbags, and a collapsible steering column.

The Insurance Institute for Highway Safety , a nonprofit research group funded by the automobile insurance industry, has not conducted safety tests on the car, said Russ Rader , director of media relations.

But citing the ``laws of physics," Rader said, ``If safety is a priority, you should steer clear of small cars. They are inherently less protected in crashes than larger vehicles."

Phillippi, the consultant, said he drove a Smart-brand car in Europe a few years ago and found it to be safe.

``It's a fun car to drive," he said. ``It's a perfect urban car for European cities with their narrow streets and parking restrictions."

Material from Globe wire services was used in this report. Chris Reidy can be reached at reidy@globe.com.

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