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Automotive Industry

Schrempp May Axe Smart Car

Automotive Industries, June, 1999 by Mark Bursa

DaimlerChrysler Co-chairman Juergen Schrempp will "turn off the money tap" if he doesn't see a dramatic climb in orders for the two-seat Smart Car within six months, reports the German newspaper Der Spiegel. DaimlerChrysler has already cut its production target from 140,000 units this year to 80,000 for the $1.1 billion project. If the program is shut down, analysts estimate closure costs would be another $1.1-$1.6 billion.

Officially, DaimlerChrysler says production of the Smart will continue, the Spiegel report as "speculation" However, well-placed sources within the Daimler ranks say the car may only last half that long and even if sales suddenly rise there is not a good business case for keeping it Plus, the quality of the highly modular car has been spotty and required a lot of repair time at the factor.

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Earlier this year the company made management changes at Smart, lowered prices and launched a major ad campaign. But the project has been hit by safety fears, which caused major rental companies to withdraw the cars from their fleets.

Automotive Industry

Schrempp May Axe Smart Car

Automotive Industries, June, 1999 by Mark Bursa

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