Smart had a difficult birth that foreshadowed a long struggle for viability.
In the early 1980s, the traditional Swiss watchmaking industry was in turmoil because of an onslaught of cheap and highly accurate quartz digital watches manufactured in the Far East. This forced the two largest Swiss watchmakers, ASUAG and SSIH(1), both of which were insolvent, into a defensive merger in 1983, forming what would become the Swatch Group after a takeover of the original Swatch company, founded in the same year by Ernst Thomke, Elmar Mock and Jacques Müller.
Swatch had been launched with a business plan to fight back against the digital invasion and regain control of the market in everyday watches. The plan was simple but brilliant: to turn the wristwatch into a relatively cheap fashion item that would be produced in a wide range of colours and styles, thereby expanding the market enormously by enticing customers to build up a collection of watches, rather than the one or two they might have previously owned.
The plan was hugely successful, and Swatch Group became the world’s largest manufacturer of wristwatches. The driving force behind Swatch Group was Nicolas Hayek, a management consultant who had been brought in by the creditor banks as CEO to oversee the merger and restructuring(2) of the legacy companies that formed the backbone of the new group.
Hayek was also interested in matters automotive and saw an opportunity to bring Swatch’s high-fashion youthful image to the automobile market. He envisaged a small and economical but stylish two-seater city car that would appeal to sophisticated young urbanites. Hayek approached a number of European automakers about forming a joint venture.
He was turned down by both Renault and Fiat, but Volkswagen Group expressed interest and negotiations were ongoing when Ferdinand Piëch was appointed Chairman in 1993. Piëch had more pressing concerns, however: Volkswagen Group had lost DM1.61 billion (US $947 million) in the first half of the year, so he had enough to do to revive the core business, and discussions about the proposed joint-venture were terminated.
Hayek instead reached an agreement with Daimler-Benz AG, announced in March 1994, and a new 50:50 joint company was formed, Micro Compact Car AG. Daimler would design the new city car, while Hayek would assume responsibility for its hybrid drivetrain. During the development of the new car, the project required additional capital, so Daimler injected the required funds and increased its stake to 81% in 1996. Progress on the hybrid drivetrain had stalled, and relations between Hayek and Daimler soured.
The new car was launched at the Paris motor show in October 1998 under the Smart(3) brand name. By this time, Hayek’s involvement in the project was marginal and Daimler bought the remaining shares in the company from Swatch soon afterwards.
The Smart City Coupé was a two-seater, rear-engined city car with a three-cylinder 599cc turbocharged petrol engine in three states of tune, producing 45, 51 or 61bhp (34, 38, or 45kW). Drive was via a six-speed Getrag automated manual gearbox. This transmission was considered ideally suited to town driving, dispensing with a clutch but not having the weight and complexity of a traditional torque converter automatic. The car was built at a new factory in Hambach, France.
One distinctive innovation in the design was the Tridion Safety Cell, made of high-strength steel and designed to dissipate forces away from the occupants in the event of an accident. This gave the occupants significantly better crash protection than would otherwise have been the case in such a small car. It also came equipped with twin front airbags and electronic stability control(4). Consequently, it was awarded a four-star Euro NCAP rating. Another innovation was plastic body panels that were easily (but not cheaply) replaced, should the owner wish for a change in colour.
The City Coupé really was diminutive, with an overall length of 2,500mm (98½”), width of 1,510mm (59½”) and height of 1,500mm (59”). The wheelbase was 1,810mm (71¼”) and the wide tracks front and rear gave it a wheel in each corner appearance for maximum stability. Kerb weight was just 730kg (1,610 lbs).
The car was initially sold in nine mainland European countries and was warmly received by its target customers for its funky good looks inside and out and its manoeuvrability. For such a small car, the City Coupé was not, however, particularly economical (overall 57.6mpg) or environmentally friendly (118g/km CO2). Worse, it was not great to drive.
The automotive website Honest John reported that the driving position was awkward: “You’ll find yourself sat too close to the steering wheel (which has no adjustment) in order to get full travel on the pedals.” The automated manual gearbox was jerky and slow-witted: “all shifts are slow with the car taking an age to find the next cog.” The unassisted steering is “direct with a reasonable amount of feel” while the handling, although safe, suffers from “bags of understeer from the tiny tyres at the slightest whiff of a hairpin.” Another complaint was a “lack of rear three-quarter visibility”, a serious drawback for a car designed for use in congested city streets.
Despite these shortcomings, the City Coupé sold well and was joined by an open-top version called the City Cabrio in 2000. Both models were facelifted in 2002 and renamed the Fortwo and Fortwo Cabrio. The engine capacity was increased to 698cc, available in two states of tune, producing 50 or 61bhp (37 or 45kW). A 799cc turbodiesel engine producing 41bhp (30kW) was also introduced. The cosmetic changes were modest, but the facelifted models are recognisable by their peanut-shaped headlamps.
Daimler was keen to leverage the new marque further and began designing two-seater roadster and coupé models that would utilise the existing drivetrain. A roadster concept had been shown at the Frankfurt motor show in September 1999, followed by a coupé concept at the Paris motor show in October 2000.
The production models were launched at the Paris motor show in October 2002 and went on sale early the following year. They shared the same floorpan, mechanical package and much of their bodywork, including the targa roof. The Roadster had an upright rear screen and flat rear deck, while the Roadster Coupé had a glass liftback and fixed rear quarter windows.
Both were underpinned by a stretched version of the Fourtwo’s platform, with the wheelbase extended by 550mm (21¾”) to 2,360mm (93”). Overall length was 3,427mm (135”), width was 1,656mm (65¼”) and height was just 1,192mm (47”). Both were powered by the 698cc engine, either in 61bhp (45kW) or 80bhp (60kW) states of tune, although only the latter was available in the Roadster Coupé.
There were also Brabus versions with the engine tuned to develop 99bhp (74kW). The engine was coupled to a modified gearbox, intended to quicken the automated gearchanges. The Brabus models were distinguished by lowered suspension, unique alloy wheels and a body kit. Inside, there were sporting embellishments and Brabus branding on the starter button and floor mats.
Smart had successfully captured the spirit of small and light back-to-basics sports cars in their new pairing and sales initially outstripped expectations. Unfortunately, the models’ reputation was soon tarnished by a range of problems, including water leaking into the cabin and numerous electrical faults, often caused by water ingress.
Such was the extent of warranty claims for these faults that Daimler had to spend an estimated average of €3,000 (US $3,600) per car on rectification work. This allegedly led to the premature termination of production after just three years, when 43,091 had been produced, 39,589 of which had been sold in Europe(5).
It was reported that automotive designer Gordon Murray attempted to purchase the rights to the Smart Roadster, intending to produce a modified version with a manual transmission to be sold under the AC marque name. The plan came to nothing.
The history of Smart continues shortly in Part Two of this series.
(1) Allgemeine Gesellschaft der Schweizerischen Uhrenindustrie and Société Suisse pour l’Industrie Horlogère.
(2) Hayek had originally been employed to oversee the liquidation of the two companies, but he persuaded the banks that he could develop a viable business following a merger and rationalisation.
(3) Smart was a contraction of ‘Swatch Mercedes ART’. Hayek had wanted to call the car the ‘Swatchmobile’ but Daimler insisted on a more neutral name.
(4) After the A-Class ‘Elk Test’ debacle of the previous year, Daimler was taking no chances with the similarly proportioned Smart. Changes to the Smart’s suspension and steering delayed its launch from March to October 1998.
(5) Sales data from www.carsalesbase.com.