The New Smart ForFour To Bring Profit For First Time In Brand's History, Says Daimler Chief
|   Wednesday, June 04, 2014
Dieter Zetsche, head of Daimler AG, said that the future Smart Forfour will be a commercial success and bring the first profit in the history of the brand. The rationale behind the big boss' statement is the fact that the new ForFour will be built on a Smart platform and have all the characteristics of the new Fortwo.

"The new ForFour is an extended ForTwo and has all the characteristics of the new ForTwo. These include a wider interior relative to the length of the car, a rear-mounted engine and several very smart ideas of benefit to customers.
So the new vehicle has all the genes of a Smart," said Zetsche.
In a separate interview, Annette Winkler, Smart's chief, referred to the ForFour as "the station wagon version of the ForTwo."

Besides, the model will have a competitive price, which will bring an advantage to those from Smart, which managed to sell 133,000 units of the previous ForFour generation, in only two years of its career, in the context in which it did not boast a competitive price, nor was it as powerful as what rivals offered.

The competitive price of the future Smart ForFour is due to several factors, including the manufacture within the Renault plant in Novo Mesto, Slovenia, sharing some components with the third generation Renault Twingo and third-generation Smart ForTwo, along with other economies of scale.

The first Smart Forfour did not enjoy these benefits. It was produced in the NedCar plant in the Netherlands, on which production lines were shared with the Mitsubishi Colt, as well as the technical platform. Meanwhile, Mitsubishi has dropped that factory. In fact this was the only Japanese manufacturer factory located on the Old Continent, and NedCar now produces the new Mini hatchback in order to support the parent factory in Oxford.

Daimler representatives did not disclose financial information separate from the Mercedes-Benz and Smart brands, but the head of the German conglomerate said that Smart was never an element to strengthen the financial position of the group.

With the new generation of the Forfour, the director of Daimler AG says that Smart has a feasible business plan, and gave up unrealistic sales targets, refusing to divulge his expectation of their subcompact. In any case, the Smart brand will never have a high profit margin compared to other Daimler brands, but its role will become more and more important to reduce group level average CO2 emissions as the rules EU are becoming increasingly stringent.

"We have a feasible business case with our new generation Smart vehicles. Had Daimler not invented Smart 20 years ago, it would have to do so today. Smart will never be at the high end of the profitability range within our portfolio, but we think it's playing an increasingly important role as far as (fleet average) carbon dioxide emission are concerned," Zetsche said.

This summer Smart will present the second generation of the ForFour model, together with the third generation of the ForTwo model. Sales of both vehicles will start in Europe this fall.
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