DaimlerChrysler Sees Future for Smart Cars, But Not with ZAP

Smart rejects ZAP order for 76,000 cars over concerns about liability and ZAP's financing arrangements.

Published: 09-Jun-2005

TGART, Germany (Reuters) - DaimlerChrysler expects above-average growth rates for minicars and microcars this decade, which is why it is hanging on to its loss-making Smart business, the head of Smart said on Monday.

"The global market for small cars will grow nearly 4.5 percent a year until 2010," Ulrich Walker told reporters at a media briefing.

Sales of microcars, the smallest category which includes the Smart two-seat model, are set to grow by around 4 percent during that period, outstripping expected annual growth of 2.5 percent for the broader car market, he added.

"This is reason enough to be confident about this market," Walker said, suggesting minicars and microcars would boost their global market share to 50 percent by 2010 from 30 percent now.

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The Smart unit, part of the Mercedes group, has not posted a profit since it started up in 1998.

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