Smart could launch a Scion rival

Boeblingen, Germany. Smart could produce a model to rival Toyota's youth-oriented Scion brand, said the brand's president Ulrich Walker.

"We are evaluating possibilities such as a 'boxy car,' " Walker told Automobilwoche.

Lifestyle station wagons such as the xB from Toyota subsidiary Scion are sales hits in Japan and the US.

Smart still is working on new product ideas despite freezing development on the ForMore, a small SUV that Smart intended to show at the Detroit auto show.

A decision on whether to build the ForMore to launch the brand in the United States will be made at the end of March.

Walker said Smart could launch derivatives of the ForFour small-segment car in 2007, although there will be no convertible version.

In 2004, Smart sold about 140,000 units, around 30,000 units below its target.

Walker said Smart expects to sell 80,000 ForFours this year, compared with 60,000 units last year.

Walker refused to give sales forecasts for the ForTwo and the Roadster.

Walker said Smart, which is the Mercedes Car Group's small-car brand, is a success story despite its lack of profitability.

He said the brand had nearly doubled its annual sales since 1998, when it sold 80,000 units. Smart's cars now sell in 36 markets, compared with only nine markets seven years ago.

"Many markets still have more potential and in some we will be using creative distribution channels such as the Internet," said Walker.

But he said China will not be one of the new markets. Walker said China is not ready for the lifestyle brand.

One of Smart's greatest weaknesses is its distribution network.

Walker plans to increase the density of the network, especially in rural areas, "so that customers don't have more than a 20-minute drive to a dealer."

He has reduced the sales and service requirements for this.

To increase the brand's popularity Walker plans to expand Smart's rental car and fleet business.

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