Arguably more than any other manufacturer, Smart is well known as a city car specialist.
Models such as the ForTwo not only beat Mini at its own game, but polarised public opinion, giving the brand increased media attention and the confidence to eventually launch an entire lineup of compact cars meant to be enjoyed in urban environments.
This range went on to include a four-seat compatriot to the original ForTwo, as well as a sporty roadster that aimed to offer a different interpretation of the same fun-to-drive ethos that was perfected over decades by the Mazda MX-5.
More recently, however, the brand has pivoted to specialising in the manufacture of electric vehicles, and is in the process of executing an ambitious product plan. So what can we expect next from Smart?
The story behind Smart begins not in the automotive industry, but in horology.
The manufacture of mechanical watches and luxury cars both require intricate craftsmanship and the highest attention to detail, and the natural links between the two industries have meant that watchmakers and automotive brands, especially luxury brands on both sides, have long fostered marketing partnerships and collaborations.
Swatch is perhaps the most affordable watch brand from Switzerland. Apart from its relatively low prices, the brand is equally well-known for its funky designs, and use of bold colours to sell highly customisable products to a youthful audience that can express their personality by wearing Swatch watches.
It was these notions of customisability, personality and affordability that Swatch thought it could bring to the automotive space during the 1980s.
Then-CEO Nicholas Hayek knew that he couldn’t hope to compete with established car manufacturers at the time, but believing that the automotive industry had ignored the need for a small, stylish car ideal for traversing narrow European city streets, wanted any ‘Swatchmobile’ to be more than just a trim level or decal pack on a carmaker’s existing model.
Instead, Hayek wanted to collaborate with a car manufacturer that would be willing to create a dedicated model that could fully express Swatch’s ideas about the modern urban automobile.
With Fiat, GM and Renault turning down offers of a partnership, and a deal with Volkswagen falling through, Hayek was able to finally reach an agreement with Daimler-Benz in 1994.
Borne out of this partnership would be a joint venture known as Micro Compact Car AG (MCC), 49 per cent of which would be owned by the same parent company that made Swatch-branded watches, whilst the remainder would be owned by Daimler-Benz.
MCC would also have oversight over two subsidiaries (SMH Auto SA and MCC GmbH) that would engineer a hybrid drivetrain and design the rest of the car respectively. It was during this time that the ‘Smart’ name would be settled upon, with Smart now being considered as a portmanteau of ‘Swatch Mercedes Art.’
A two-seat design was settled on, and whilst engineering was largely completed by early 1997, the R&D and manufacturing cost exceeded Hayek’s forecasts, to the extent that Daimler-Benz increased their ownership of MCC to 81 per cent.
Instead of the innovative hybrid powertrain envisioned by Hayek, the production Smart car, now known as the ‘City-Coupe’ and launched in 1998, featured a conventional petrol engine. In this time, Daimler-Benz bought the remaining MCC shares owned by the Swatch parent company, effectively turning Smart into a Daimler subsidiary.
Smart continued to be under Daimler control until 2019. In 2019, Daimler struck an agreement for a 50:50 joint venture with Chinese company Geely (owner of Volvo and Lotus), whereby future Smart vehicles would be electric only, engineered and manufactured in China by Geely, but designed by Mercedes-Benz.
Currently, Smart has retreated from some of the markets it previously had a foothold in, including Australia and the US, and is largely focused on the UK and European markets, with a limited presence in Japan.
Smart vehicles were sold in Australia from 2003 to 2015.
The Australian range included the original ForTwo hatch over two generations (originally introduced as the City-Coupe in the Australian market in 2003, and also available as a cabrio); the larger ForFour hatch; and the sportier Roadster.
Total cumulative sales exceeded 4400, with the vast majority of these being the smallest ForTwo model.
Annual sales peaked in 2005 with 799 Smart models sold, but since then, sales entered a gradual decline, with just 108 examples being sold in 2014, the brand’s last full year on sale, with Smart having moved to an exclusively online order system in June 2013 – revolutionary at the time.
Faltering sales were the primary reason for the brand’s withdrawal from our market, and with the entry-level ForTwo priced from $18,990 drive away (a similar price to a base Corolla at the time), this was understandable.
Smart is currently revamping its entire model range.
The brand transitioned to an EV-only model line-up in 2019, revealing battery electric versions of the third generation ForTwo and ForFour, which were originally launched in 2015 with combustion engines. However, even these EV versions are in the process of being discontinued.
Instead, the focus of the brand has been on developing and launching the new Smart #1 small SUV.
The first Smart to be produced in China as part of the Geely partnership, the 4.27m-long #1 features a 66kWh battery providing a maximum driving range of 440km under the WLTP cycle, and a motor producing 200kW of power and 343Nm of torque, driving the rear-wheels.
Built on Geely’s SEA (Sustainable Experience Architecture), a dedicated EV platform, it is highly likely that all future Geely models will also use similar underpinnings.
With the #1, Smart has continued to position itself as a semi-premium offering just below Mercedes-Benz vehicles, with the interior design and materials of the #1 taking cues from Mercedes counterparts.
Neither Mercedes nor Geely have made any firm commitment around the Smart brand making a return to Australia.
However, given the much more palatable size of the #1 crossover, its semi-premium positioning and competitive range and power figures, it is possible that any future Australian launch could see the #1 undercut other smaller electric SUVs price-wise, such as the Mercedes-Benz EQA, Volvo XC40 Recharge and BMW iX1.
Pricing of the Smart #1 would also have to consider indirect competitors such as the forthcoming Cupra Born if launched locally.
MORE: 2023 Smart #1 unveiled