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Is the Smart car finally proving to be a smart investment?

If, long ago, you parked any possible urge for one of Daimler AG's Smart cars, concluding the whole project has forever seemed like a dumb idea, let me introduce you to the furiously energetic, endlessly optimistic Tim Reuss.

The scrap heap for Smart, Tim Reuss?

"Look at this. Do you think we're going to cancel Smart?" says the president and CEO of Mercedes-Benz Canada, vigorously pointing to a stage where shiny and all-new versions of the Smart fortwo and forfour have made their global debut. Behind Reuss, under the hot lights on a steamy summer evening – there's no AC in Berlin's Tempodrom event centre – are reinvented two- and four-door Smarts. They look good and come to Canada next summer.

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Daimler likely spent between $500-million and $1-billion to reinvent its Smarts. Throwing that sort of money at a brand that has lost billions since it was launched in 1998 is a sign of patience, proof of belligerence or simply wonderful prescience. Reuss, Daimler CEO Dieter Zetsche and all the company brass are, in fact, arguing for a Smart future in a warming world of increasingly congested cities. They could see this coming, we're told, somewhat immodestly.

Zetsche says the Smart brand in 2014 is at the leading edge of major mobility trends. Half the world now lives in cities, and the number of city dwellers is growing by 180,000 daily. They're not all going to ride transit or bicycles; many will want a car. Between now and 2025, Zetsche says the auto industry globally will sell 280,000 new cars a day. Smart will get its piece of that business.

Three-cylinder, bread box-sized micro-cars make sense in downtown Toronto, Berlin, or Beijing. Daimler doesn't even expect you to buy one, either. Just rent your "urban mobility solution" by the minute from Car2Go, Daimler's self-owned franchise in part invented to create a market for Smart cars. Yes, Daimler sells Smarts to itself.

That might be construed as desperation, but it's turning out to be a masterstroke. Car2Go has kept Smart alive long enough for events to catch up to the brand's earth-conscious concept.

Daimler officials say Smart is an example of corporate prescience, but I'm skeptical. Smart is more a case of patience turning into belligerence. Smart was launched not as an eco-car, but as a fashion statement co-created with a watch company.

The fact is, Daimler officials had hoped to sell 150,000 profitable toy cars to wealthy trendsters in Paris, Rome and the like. The cars themselves were built at a factory in France, not exactly a hotbed of low-cost manufacturing. But sales never met expectations.

Daimler officials refused to quit. I think they believed over time the Smart novelty would go mainstream. It didn't, yet Daimler dug in its heels and kept scrambling.

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Smart played with the idea of a high-performance brand, but the Brabus strategy stumbled. Even in the worst years of the recession, Daimler refused to admit defeat and opt for the commonsense solution – kill Smart and stop the bleeding.

"If we were going to kill Smart, that would have been the time to do it," Reuss says.

That time has passed. Whether it was good planning or pure luck, global events have caught up to Smart which, among many things, has a future helping Mercedes-Benz meet toughening fuel efficiency and emissions rules that only started to get serious in the late 2000s, a decade after Smart arrived. The sustainability movement, the need to minimize the human footprint, car sharing, the slow but steady erosion of the big car as a status symbol, are all breathing life into Smart.

History is strewn with ideas that failed or were scrapped before their time had come. Canada's Avro Arrow jet in the late 1950s and the 1948 Tucker Torpedo are excellent examples. Smart might have joined that group, but won't because Daimler is an inventive and dogged car company.

The writer was a guest of the auto maker.

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More


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