Smart’s future on the line

German premium car-maker Daimler has said it will decide the future of its loss-making smart city-car brand by the end of the year.

Indeed, according to Autobild, Mercedes-Benz is reportedly already developing a family of small cars starting with a smaller version of the latest A-Class, to be called the Mercedes A-City and priced from about $30,000 to rival premium mini-cars like the Audi A1 and MINI hatch when it arrives in 2022.

Insiders say smart has never made a profit and that outgoing Daimler chairman Dr Dieter Zetsche and his anointed replacement, Ola Kallenius, have lost patience with the brand.

German newspaper Handelsblatt has reported an insider as claiming Daimler’s next CEO, Kallenius, had "no history with smart" and would have "no scruples about killing the brand if necessary”.

Launched in 1998, smart was last year repositioned as an all-electric city-car brand that encompassed urban mobility as well as cars, but Daimler has less need for smart than ever before.

The advent of plug-in hybrids, 48-volt mild-hybrid systems and a scheduled rollout of 10 Mercedes-Benz EVs by 2022 mean it will no longer need smart’s tiny engines to offset the CO2 emissions from the Benz brand’s heavyweight limousines.

Even slashing its development costs by sharing its rear-engined platform with Renault for the French company’s reborn Twingo hasn’t worked. Renault has reportedly had enough of its city-car losses and will not renew the Twingo/smart deal.

Mercedes-Benz axed the smart brand in Australia in 2015, choosing not to take the current generation of the smart fortwo and forfour. Global sales of both models fell 4.6 per cent last year to only 128,802 cars.