Not Smart Enough (Part Three)

Where next for Daimler’s problem child?

2015 Smart Fortwo. Image: Auto&amp

The 2007 second-generation Smart Fortwo got off to a disappointing start as it was generally regarded as not enough of an advance over its predecessor, and too expensive. For a similar price, one could buy a four-seater supermini that might lack the Smart’s distinctive style but would be more practical and less compromised dynamically.

Smart had been developing an electric version of the Fortwo since 2006 and this model(1) was launched in 2009. It was initially fitted with a 14kWh lithium-ion battery pack supplied by Tesla and a 30kW(2) electric motor, which gave it an official NEDC range of 135km (84 miles). Around 2,300 Smart ED (Electric Drive) models were produced and made available to lease in a number of European and North American cities as part of an extended field trial for the model prior to mass production, which was scheduled to start in 2012.

The third-generation Smart ED was unveiled at the Frankfurt motor show in September 2011. The battery capacity was increased to 17.6kWh and the car was fitted with a more powerful 55kW(2) motor. This gave an improved official range of 145km (90 miles). 0 to 100km/h (62mph) took 11.5 seconds and top speed was 125km/h (78mph). The ED was priced in Europe at €16k plus a €60 monthly leasing charge for the battery pack.

2011 Smart ED. Inage:

Returning to the regular Fortwo, it received minor revisions to the interior in 2011, introducing knee-level airbags and trim and equipment upgrades. The exterior received an even more modest facelift in 2013, comprising altered bumpers and a badge relocated from the bonnet to the grille.

The second-generation Fourtwo remained on sale until 2014, when it was replaced with an all-new model. Total sales over eight years were around 720,000(3). Its predecessor had sold around 770,000 units over the same period, so the Fortwo had failed to expand its market significantly and instead appeared to have lost ground(4). The Fortwo had faced increased competition from conventional but well executed four-seater city cars such as the 2005 Peugeot 107, Citroën C1 and Toyota Aygo triplets and Volkswagen’s 2011 Up! and its Škoda and SEAT siblings.

Daimler was again faced with the same dilemma: how to increase sales to justify further investment in Smart’s bespoke platform and drivetrain? This time it turned to another partner, Renault, with which it had signed a technical partnership agreement in April 2010, which led to co-operation on a number of powertrain and vehicle programmes.

Renault was seeking to develop a replacement for its 2007 second-generation Twingo city car(5). The two automakers agreed to co-develop a new rear-engined architecture that would underpin the Twingo, new Forfour and a shorter wheelbase Fortwo. It was hoped that the resulting economies of scale would help to turn around Smart’s fortunes.

The third-generation Twingo was launched at the Geneva motor show in March 2014 and its Smart siblings were unveiled in July of that year. The Forfour was mechanically identical to the Twingo and shared its 2,490mm (98”) wheelbase, although it was 95mm (3¾”) shorter at 3,495mm (137½”). Both shared the choice of Smart’s 999cc normally aspirated or Renault’s 898cc turbocharged inline three-cylinder petrol engines. The former produced maximum power of 70bhp (52kW) while the latter produced 89bhp (66kW).

Smart’s problematic automated manual gearbox was finally replaced by a choice of a conventional five-speed manual or six-speed dual-clutch automatic transmission(6). An electric version was also offered with a 60kW synchronous motor. The Forfour retained the Tridion safety cell of the Fortwo(7). It would be built alongside the Twingo at Renault’s plant in Novo Mesto, Slovenia.

Twin: 2014 Renault Twingo. Image:

The third-generation Fortwo was stylistically similar and mechanically identical to the Forfour. It had a wheelbase of 1,873mm (73¾”) and overall length of 2,695mm (106”), figures virtually identical to the superseded model. Width and front and rear tracks had increased by around 100mm (4”) for greater stability and an improved turning circle. Like its predecessors, it would be built at Daimler’s plant in Hambach, France.

Autocar magazine tested the new Fortwo at launch in 2015. The introduction to the review was downbeat: “the Fortwo has failed to emulate the phenomenal success of the original Mini and Fiat 500 [and] has stagnating sales of 100,000 a year, having been in decline since 2004.”  It had failed “to present the benefits of ultra-compactness without also imposing too many undesirable compromises.” Perhaps the third-generation model would finally address these compromises?

The exterior styling was familiar, but the interior displayed a “pleasant enough return to the kind of funky look conveyed by the original Smart.” The “extra width is appreciated – especially if your companion has broad shoulders” as was a 40-litre increase in boot space to 260 litres (9.18 cu.ft.)

Unlike previous models, which had “glacial” 0 to 60mph (97km/h) acceleration, on test the new Fortwo achieved this in a respectable 11.2 seconds, if not matching the “possibly rather optimistic” claimed time of 10.4 seconds. The throttle response was, however, rather uneven, “briefly stuck somewhere between a throttle flat spot and a winded turbocharger.” High gearing also “tends to leave the car rather breathless in its top cog [on] a standard 40-50mph A-road clip” but the compensation is that “motorway journeys previously dreaded by some Smart owners are now well within the new Fortwo’s capabilities.”

The ride quality was noticeably better than the previous model, but the Fortwo still felt “like a car engineered to produce only a limited amount of grip at the front end” and the steering was “still utterly uncommunicative beyond very low speeds.”

2014 Smart Forfour. Image:

Once again, the case for the Fortwo disintegrated on the issue of pricing. The £11k entry price would buy “a very nice five-door Up! in pretty rich specification” which would be cheaper to insure. Even the claimed overall 67.3 mpg “would be extremely hard to achieve in the real world.” Hence, the Fortwo was awarded just three stars (out of five). The only crumb of comfort offered was that the Forfour cost only £495 more than the Fortwo and might make a more compelling proposition.

A Brabus version of the Fortwo and Forfour was introduced in 2016 with an uprated turbocharged triple producing maximum power of 106bhp (79kW). An electric version was also offered with a 60kW synchronous motor from 2017.

Smart sales over six years from 2015 to 2020 inclusive were around 565,000 and the company once again failed to sustain a break of the 100,000 sales per year barrier. Exports to North America were terminated in April 2019 after a decade of decline led to fewer than 2,000 sales in 2018.

Given that Volkswagen Group and Stellantis have openly questioned the future viability of sub-B-segment city cars like the Up! and 108, it is little surprise that Smart cannot achieve the sales volume to justify the investment required to sustain its unique rear-engined architecture. There are simply not enough customers who value the USP of the Fortwo highly enough to put up with its limitations, and the Forfour is pitched against more conventionally engineered, cheaper and more capable competitors.

Daimler does not publish separate financial statements for its Smart subsidiary, but one analyst, Evercore ISI Investment Bank, estimated in 2019 that Smart’s losses were between €500 million and €700 million (US $560 million and US $784 million) annually. As long ago as 2013, Sanford C Bernstein research estimated that the Smart Fortwo was the second biggest loss-making car line of the previous decade, with cumulative losses of €3.35 billion (US $4.53 billion).

A smarter future? 2021 Smart #1 Concept. Image:

In March 2019, Daimler announced that it was ending its Smart partnership with Renault and had formed a new 50:50 joint venture with China’s Geely Automotive. Future Smart models would be all EVs, manufactured in a new factory in China. They would be styled by Mercedes-Benz, engineered by Geely, and target the growing B-segment global market.

In December 2020, Daimler announced the sale of Smart’s Hambach plant to Ineos for production of the Grenadier off-road vehicle, reportedly safeguarding 1,300 jobs.

In September 2021, Smart unveiled the Concept #1, a four-seater B-segment crossover EV. It is a moot point as to whether or not this signals an abandonment of Smart’s traditional sub-B-segment market, but I would suspect that it does. The Fortwo was a brave attempt to offer something different to the market, but it has comprehensively failed to make a financial case for itself. With the move to China, all that will remain of the original vision is the name and whatever brand equity it has accumulated. Is it worth preserving? Time will tell.

(1) This was launched as the ‘second-generation’ ED. The ‘first-generation’ model was limited to 100 cars leased for field trials to users in London, one of which was the Metropolitan Police.

(2) Peak (not continuous) power output.

(3) Sales data from

(4) While the second-generation Fortwo’s lifespan straddled the 2008 Global Financial Crisis, this had no discernible effect on its annual sales, which remained steady throughout the period.

(5) The Twingo was a wholly conventional transverse-engined FWD hatchback.

(6) It remains a mystery why Daimler persevered for so long with the automated manual gearbox, the car’s Achilles heel since its launch in 1997.

(7) The first-generation Forfour, which was a rebodied Mitsubishi Colt, did not feature this innovation. 

Author’s note: My thanks to DTW Editor Eóin Doyle for his insights and contributions to this series.

Author: Daniel O'Callaghan

Shut-line obsessive...Hates rudeness, loves biscuits.

27 thoughts on “Not Smart Enough (Part Three)”

  1. In the UK , the 2015 onwards ForFour was heavily discounted and rarely sold at full price. Following hiring one in Italy in 2016, I was pleasantly surprised with its ride quality and comfort compared to the usual car hire fare of various Fiat and VW group offerings. So my wife is now on her second turbo version (90 bhp) and we have both found it to be an excellent town car . I understand the engine borrowed technology from Ford and is a very “ peppy” unit. Of course there is no way it was worth the list price of circa £12.5k but at £8.85k , the 90 bhp turbo is in my opinion a better and more interesting proposition than the basic Up. It was interesting that a manufacturer finally launched a five door rear engined small car after all these years of talk of future Mini and VW models using this configuration, none of which , of course, came to fruition. So an heroic failure for Daimler but a quirky success for us .

    1. Good morning mpauln. Thanks for your comment, and good to hear about your positive experience with a Smart. As I think I mentioned in an earlier comment, a neighbour of ours is on her third Fortwo and always looks very happy when I see her driving it. The car suits her quirky character very well and makes me smile whenever I see it. For that alone, it’s a pleasant addition to the local streetscape.

  2. I agree with Daniel’s sentiment that I like having the ForTwo Smart around, and, as I wrote previously, I loved the earlier Roadster and Coupe versions. The current cars don’t really do it for me, which is odd as I usually welcome something different, and, with its rear-engined configuration and interesting Tridium body construction, the Smart ForFour should really be in my of strike zone. I was more drawn to the Twingo version, but even there it just looks like a missed opportunity.

    The incoming EV is a bizarre thing. It doesn’t look like a Smart (more a cross between a MINI and the old GM Europe Adam) and it abandons the part of the Market which Smart was first designed to claim for its own. Maybe we won’t see it in the UK as I am not sure it will be worth them bothering.

    1. The whole business model around the original Smart did not work because sales numbers were far too low.
      They’d firmly nailed themselves into a tiny market niche and their product as well as their advertising made sure they couldn’t get out of the trap they’d set up for themselves.
      Their biggest problems sales-wise was that the product was so polarising that it appealed to a far too small and non-expandable number of customers and they could not create additional or repeat business so they had to enter new markets all the time to keep up the sales numbers.

      What can they do?
      Continue with what they already have – then sales numbers will never reach sustainable levels because they won’t find additional customers.
      Do something new?
      The brand around their product is so firmly identified with the product that this is a highly risky strategy but the only way to go when they want to sell more cars by finding new customers and creating repeat purchases.

    2. For a brand like Smart my assumption is it´s difficult to rely on repeat purchases. If the buyer is a young man/woman (say 25 years old) that buy a ForTwo as a city car, when he/she is 30 probably will need a bigger car like a Golf/medium size CUV to take his/her new family on it. Smart doesn´t have something like that on its model range. If he/she hasn´t traded the ForTwo in and keep it as a second car, it won´t be replaced by a new one as typical family expenses don´t allow it.

      Otherwise, if the ForTwo is bought new as a second or even third car in the family, again it isn´t replaced very often; usually they last and last until they become uneconomic to repair…or until the young son/daugther with his fresh driving licence crashes it on a Saturday night.

    1. Just checking that people are paying attention, Mervyn…😁

      Typo now corrected, and the proof-reader will be suitably chastised.

  3. Hi Daniel, thanks for the comprehensive write-up. I think the case is that the available market segment and the required investment just didn’t match. Probably the somewhat idealistic origin story of the Smart as a genuinely different kind of transport (arguably obsolete now) was the reason that Merc persisted so long. Their very specific niche made it impossible to position it as a direct competitor to MINI (again, all caps courtesy of BMW), however much they probably wanted to.

    Frankly, the #1 concept means that they’ll be doing just that, including styling cues (to my eyes anyway). Styling by Mercedes Benz is not the recommendation it used to be (and Merc itself probably thinks it is); engineering by Geely isn’t necessarily either, but it will probably mean it’s substantially cheaper to produce. That alone should help the business case – at the cost of Smart’s uniqueness. That uniqueness, however, has proven to be of too limited appeal.

    I remember there being considerable excitement for the new Twingo and (although that went on sale later) Smart, but some disappointment at how it’d turned out. Decades of an entire multi-billion-dollar-industry putting its collective development brains into transverse front engined and front wheel drive concepts obviously wasn’t easily caught up to by Renault and Smart. The car’s not particularly space or cost efficient, surely the first criterion for an A-segment car. It’s also a little too narrow for its other dimensions, making it float in an unsatisfying limbo between supermini, MPV and SUV. Shame, because I want to applaud the courage of Renault and Smart for thinking outside the box.

    It probably didn’t help that the styling cues of the Twingo were from the Renault 5, which – as has been covered here as well – was quite resolutely not rear-engined but part of the wave of front-engined superminis that superceded their largely rear-engined forebears. Confusing matters even more is that some other styling cues refer to the 5 turbo, which was mid-engined…

  4. An odd design failure about the early 3rd gen Smarts/Twingos is that due to the rear-engined layout the engine heat may cook whatever you placed in the trunk. 30-40 °C degrees on the floor above the engine were not uncommon on early models after more demanding uphill drives. They quick-fixed it with a better heat shield, but there’s no 100% insulation, thus unfortunately not an ideal supermarket-goer vehicle if one likes fresh dairy or frozen goods. I assume earlier Smarts also suffered from similar problems to a certain degree due to being rear-engined, though being mainly interested in the Renault models I know only that engine bay insulation check is a necessity on every Twingo.

  5. I’ve always had a nagging doubt over how stable a Fortwo actually is. Having seen a clip from the (deep breath) Smart EQ Fortwo e-cup, they don’t seem to be too bad, in the hands of expert drivers, it has to be said.

    I think that the overtaking manoeuvre by number 34 to win the race is a thing of beauty and the excitement level is enhanced wonderfully by the commentary being in Italian. Move over, F1.

  6. Surprising Clarkson hasn’t tried dropping a piano on one yet – or have I missed it ?

  7. I commented on another site that bringing Smart back as a CUV seems a little pointless given that none of what makes a Smart a ‘Smart’ is there anymore on the #1 concept. No more Tridion, no more itty-bitty size and dorky city-car proportions, it just looks like a downsized EQB. However, given the lack of warmth for the brand in Western markets I suppose it makes sense for it to become a Chinese-only brand and Geely is certainly one of the most results-oriented Chinese carmakers out there with Volvo, LEVC, and Lotus all being quite active under them. My grandmother keeps threatening to replace her late-model Accord with a Smart ED since she posits that it’d be perfect for her 15 mi commute between her home and art studio, but considering her driving abilities and the dimensions of the Fortwo I genuinely think that she might just fall off a levee in a strong crosswind were she in a Smart.

    Overall the Smart experiment just seems like a bit of hubris on Daimler’s part. Sure, the first gen was a valiant effort with the Swatch ideation of the concept, but to continue on and make several generations of a car that is clearly not what the market wants and too expensive for its own good seems a bit pointless. I would even argue that the Colt-based Forfour with the fake ‘Tridion’ painted onto its bodyshell verges on false marketing since Tridion has always been one of Daimler’s biggest selling points for Smart, at least here in the U.S. (where the Forfour never made it). I guess the final question is, has Smart ever generated a profit for Daimler? I’m not sure if that’s discernable or if Daimler keeps that secret, but overall Smart just seems like a very costly way to make not a very good car.

    1. Good morning Alexander. In reply to your final question, Daimler doesn’t release separate accounts for Smart, but analysts seem to coalesce around an annual loss in the order of €500m minimum, which equates to €12bn over the lifetime of the venture. Even for a group as large as Daimler, that’s not loose change.

    2. See, it seems like a mismanagement of lower-cost brands wasn’t solely a circumstance of Daimler-Chrysler, Mercedes just doesn’t know how to act when they’re not selling Benzes!

  8. I don’t really understand “Tridion” because every car’s passenger cell is required to have the same degree of structural integrity. It brings to mind a concept I understand even less: the double floor of the first A-Class. Ostensibly the goal was to prevent the engine from encroaching on the passenger cell, and also to keep it from littering the tarmac?

    1. Your comment got me thinking about why it wouldn’t just be fine to allow the engine to ‘litter the tarmac’ in an accident, as it were. I think the concept was that the ‘sandwich’ construction causes the engine to be held in place as a ‘barrier’ between the collision and the occupant cell, thus helping to prevent cabin ingress on such a small car since Mercedes was keen to promote it as being just as safe as their standard offerings. This is similar to how when Volvo started putting the Bridgend SI6 in their cars they advertised that a transverse I6 would act as a ‘wall’ in a collision and thus help absorb and dissipate energy away from the passenger cell. I’m not sure how well either of those concepts work in practice, but given that those era of Volvos got 5 stars from IIHS (all U.S. P3 cars got the SI6) and the A-Class got 4 stars from Euro NCAP there must be some degree of truth to it.

  9. A few mentions of the rear engined Twingo here. I’m curious to know what others think of the strange styling of the rear waistline. It’s as if the design team gave up at some point, but just as a last flourish they decided to put a coach line along the flanks just to emphasise the strangeness. Perhaps it’s just me?

    1. I don’t understand why that ‘corrugated’ swage line exists on the Twingo. On the Forfour, the side has perfectly straight elements that go front to back, so presumably nothing about the platform necessitates that stylistic choice. It makes a little more sense with the full ‘stripe’ since it gives that line more shape and area, but I’m still not sure how I feel about it:

    2. I think it’s meant to (more or less) evoke this:

      Analogous (but executed in a cleaner way, I think) to Audi’s recent design flourishes meant to evoke the Quattro:

    3. replying to Tom V: ah! I see it now, I suppose at the time the gen 3 Twingo released it was Renault’s only RMR-RR layout car so of course it’d have to carry the lineage of the great mid-engine hatches. Still, how different is that from the original monospace that the Twingo launched as in 1992?

    4. That last Twingo is a bit convoluted in its styling cues. Upright and narrow with just hints of the delightful innocence that the first one radiated, but also styling cues from a rally machine.

      The first Twingo was a truly original concept, the second utterly bland, the third somewhat misguided.

  10. The Fourtwo provides a unique offer. Comparing it to a VW Up I think is missing the point. This is probably the only car which you can park head onto the curb. Whether this is legal or not does not appear to dissuade owners from doing this where I live in the south of France. I think it is necessary to separate the concept of a small car with that of an entry-level car. Conflating the two ideas should not be necessary.

    1. Yes, but to offer a small car that isn’t entry level takes a lot of effort and attention to detail in ensuring the car feels like the price it’s worth (see: BMW Mini). I don’t think this interior made many friends, and it certainly didn’t seem worth the price compared to the Up!

      Honestly, it kind of reminds me of the interior on the new Aygo X. Yeeech.

  11. Good evening all and thanks for your comments. There’s an interesting and unfortunate symmetry in Daimler’s attempt to expand its range of passenger cars both upwards and downwards. Maybach is now reduced to a trim level of questionable taste, while Smart will soon exist in name only. I wonder if any Daimler senior executives ever lost out financially for the catastrophic decisions behind these failures?

    1. The string of catastrophic decisions at Daimler is impressive and you better don’t think about the financial consequences.
      It started under Edzard Reuter who might have been a nice guy but didn’t know anything about cars and didn’t care about them. His approach was typical for German self-proclaimed intellectuals who despise cars and everything that comes with them. W210, A class and Smart are characteristic for this line of thinking. Two of the financially most disastrous decisions fell into the responsibility of his successor Schrempp: the takeover of Fokker and Dornier. Fokker was a financial millstone of which everybody had warned Schrempp and at Dorner they hadn’t done their due diligence before the hostile takeover and led to a lengthy court battle with Nadine Dorner-Tiefenthaler and cost them dearly.
      Egomaniac Schrempp wasn’t any better, only his motives were different, he threw money out of the window to bolster his oversize ego.
      What would have happened to Daimler if they had put somebody like Fugen-Ferdl in the hot seat instead of Reuter and Schrempp?

  12. Could the Mercedes Studie A 93 (and later concept) as far as size goes have made a fairly decent basis for an early 700-1200cc (or 800-1200cc) Smart Forfour, whilst sharing much of both the smaller Fortwo and A-Class as possible instead of going with the Mitsubishi Forfour proposal?

    Have to say from an enthusiast pov was disappointed the later rear-engine Forfour and Twingo did not live up to the hype in terms of dynamics (and omission of a Renaultsport model, let alone a small sports car as both a 3-cylinder Alpine A110 in miniature or Smart Roadster replacement).

    Would other small rear-engine projects developed by other marques from the 90s and beyond, such as the 1995 Opel Maxx by Bertone, Rover Spiritual duo and VW’s alleged rear-engined Up alternative (in addition to others not mentioned) have received a similar reception had they been given the green light?

  13. I‘m late to the party but really don’t get why the ForTwos get so little love.

    It was conceived as a fashion item from the start, occupying a unique place in the market. Never was it meant to provide basic, entry-level transportation. Which means it is pointless to compare it with Up!s and Aygos and the like. I know quite a lot of Smart owners, many of them repeat-Smart-shoppers, who love their usually high-specced little runabouts for what they are: very clever and useful in most inner-city use-cases. Granted, a ForTwo has never, doesn’t, and will never make much sense in places where parking spaces are abundant … but that is just not the case in so, so many people‘s lives. There‘s a reason why they are literally everywhere in Rome, Milan and Paris.

    Personally, I really like the current ForTwo. It is nippy and fun, with a ridiculously small turning circle, all without the truly hateful transmission of the first two generations. I‘ll hate to see it put to pasture.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: