smart Brand to Launch in U.S. in 2006 With Unique SUV Model

Global smart Line Grows to Six Models

BOSTON, April 14 -- smart, the global automotive brand that is revolutionizing the design, production and marketing of premium small vehicles around the world, will enter the U.S. market in 2006 with a new sport utility specifically designed for the American consumer. Named the smart formore, the new smart utility vehicle will bring the brand's unique engineering, design and exuberant character into one of the market's most popular segments.

A member of the Mercedes Car Group, smart is an entry-level premium car manufacturer that debuted in 1998 and offers six models in 31 markets. Starting in 2006, the smart formore will be built in the Mercedes-Benz plant in Juiz de Fora, Brazil. The plant has a capacity of 60,000 cars per year, half of which will be sold in the U.S. in a full sales year. Currently, other smart models are built in the smartville complex in Hambach, France near the German border and at the NedCar facility in Born, Netherlands.

From Zero to Six Models in Five Years

Since the global brand launch in 1998, smart vehicles have been changing perceptions of what small vehicles can offer in terms of safety, performance and utility. Only six years after the launch of the first smart model, the city coupe, the brand now offers a line of six distinct models. With the arrival of the smart cabrio, crossblade, roadster and roadster-coupe models, smart grew from a single-product company to a multi-car manufacturer. The newest smart is also the brand's first four-door model, called the forfour, which began production in early 2004 at the NedCar facility and went on sale in many markets in April. New smart models are given names that have a direct connection to the uses of the vehicle.

Art on Wheels

The success of both the smart brand and the company is recognized throughout the global auto industry. The eye-catching shape of the smart fortwo has secured its place at the Museum of Modern Art in New York City. To date, it is the only production vehicle to be displayed in a museum while still in production.

A New Vehicle Concept

The smart story began in April 1994 with the founding of a joint-venture company called Micro Compact Car AG by Mercedes-Benz AG and SMH, the maker of Swatch watches. Daimler-Benz AG took over the Swatch Group's stake in November 1998, and the approximately 100 smart retail centers in Western Europe became part of the newly merged DaimlerChrysler organization in the following year.

New Car, New Market, New Network

The launch of the two-passenger smart fortwo in October 1998 marked the debut of the new brand and the birth of a radical new vehicle concept, as well. Only eight feet long, the smart fortwo helped to develop a previously non-existent market segment. This ambitious launch also involved an innovative distribution network and an entirely new cooperative arrangement between manufacturer and suppliers.

Welcome to smartville

Based in Hambach, France near the German border, smartville is a unique manufacturing operation that features eleven different plants, many operated by suppliers. To minimize transportation and storage, parts and pre-assembled sections are delivered less than 30 feet from the assembly line. During assembly, each smart vehicle passes through 140 different stations in just 4 1/2 hours. The annual capacity of smartville stands at 120,000 for two coupes and cabrios, with about 2,000 (approximately 800 at smart France and 1,200 at the local suppliers and system partners) employees working two shifts. Across the Rhine River in Boblingen, Germany, a new corporate headquarters opened in early 2003 and now provides work space for nearly 1,400 employees.

Novel Product Concept

The smart city coupe-now called the smart fortwo coupe -- was specially designed for use in large, crowded cities, and two of these innovative vehicles will fit crosswise in one conventional parking space. The original city-coupe was available with a choice of two different gasoline engines. A CDI diesel was added for 2000, along with the open-top smart fortwo cabrio. The smart diesel is the best-selling "three-liter" car in the world, a distinction used to describe cars that use less than four liters of fuel per 100 kilometers, which translates to about 60 miles per gallon.

In September 1999, smart unveiled a roadster concept at the Frankfurt Auto Show, followed by a concept for the smart roadster-coupe a year later at the Paris Show. A smart crossblade show car appeared at the 2001 Geneva Show, and the reaction was so positive that all three models were approved for production.

Solid Market Growth

The trendsetting smart fortwo was originally launched in nine European countries, and three key markets were added in 2000 - Japan, the United Kingdom and Greece. With continued market development, smart cars are now being sold in most European nations as well as Taiwan, Hong Kong, South Africa, Israel, Australia and Mexico.

The "smart k" model offered in Japan is exempt from the usual need to show proof of a parking space before purchase, and the car complies with Japanese regulations for "light vehicles," which mean lower tax and insurance rates than conventional cars.

  Global market growth has meant solid sales increases for smart every year:

   1998:    20,000
   1999:    80,000
   2000:    102,000
   2001:    116,000
   2002:    122,300
   2003:    124,700

With the launch of the smart formore, the brand's first four-door model, sales are expected to increase again in 2004. Retail sales began with 100 distribution points, and now smart vehicles are available from more than 700 sales partners around the world, each with its own distinctive showroom.

smart (www.smart.com) is a premium small car manufacturer that is part of the Mercedes Car Group business unit of DaimlerChrysler. Celebrating its sixth anniversary, smart is currently available in 31 markets, with global sales of 124,700 units in 2003.

smart USA (a separate division within Mercedes-Benz USA) is based in Montvale, N.J. and is responsible for the U.S. sales and marketing of the brand. smart will launch the formore, a new model designed specifically for this market, in 2006.