Smart debate reaches the top

The debate over the future of the Smart city car brand in Australia has reached the desk of Daimler global boss Dieter Zetsche.

And while he backs the brand and wants it to succeed in Australia, he says the green light can only be given to roll out the third generation range here if the business case stands up.

Mercedes-Benz Australia/Pacific had hoped to resolve the future of Smart in Australia by the end of 2014, but fundamental questions about the cost of the new ForTwo and reborn ForFour and the amount of sales they can generate per annum are proving huge obstacles.

motoring.com.au understands a decision still hangs in the balance and could still be as far as two months away.

"I think the verdict isn't spoken yet, but I know about this discussion for the very reason you are mentioning," Zetsche told Australian media when quizzed about Smart at last week's C 63 launch in Portugal.

"When we have the chance to have a reasonable amount of sales for Smart in this market we would like to continue it," he added.

"We need a certain base investment and you must get a return on that."

The new Smart range is now being rolled out in Europe. Co-developed with Renault, it includes a new triple-cylinder, rear-drive and two and four-seat versions.

The new Smarts have been widely praised as a significant improvement compared to their predecessors, which is a key reason Mercedes-Benz Australia/Pacific is still trying to make a difficult business case work.

However, M-B A/P sold just 108 Smarts in Australia in 2014, with pricing pitched at $19,000 driveaway. The prospect is the new cars would be more expensive when they need to be thousands of dollars of cheaper to sell in the numbers that would make a business case viable.

But pulling the brand would clearly go against the grain for M-B A/P, which has invested millions in Smart's development since its 2003 launch, including a web-based retailing scheme.

There is also the prospect of a dramatic range expansion for Smart in the next few years that could boost viability, with a cabrio and electric vehicle confirmed and a longer four-door and SUV said to be under consideration.

While not offering his own preference for a thumbs up or thumbs down for the brand in Australia, Zetsche did make it clear he believed Smart could work.

"Smart is clearly a city car – the city car," he said.

"There are big cities in Australia and there is money to be spent in Australia as well and Australia has a lot of understanding for the notion of lifestyle in general, so you should think you can put these elements together."

Pictured: smart fortwo cabrio spy pics