DETROIT - DaimlerChrysler has relaunched its Smart car in Europe to boost sales, but Chairman Robert Eaton said the company still could kill the tiny two-seater.
The automaker is spending nearly $70 million to relaunch the car in Europe.
'We have put significant content in the car, we've lowered the price some, we've increased the expenditures for marketing and advertising, and we've indicated clearly we're going to try to turn that around,' Eaton said during a conference call on first-quarter earnings last week.
'On the other hand, it's possible we'll conclude that it's a good idea, but one whose time simply hasn't come,' he said.
Micro Compact Car, the DaimlerChrysler subsidiary that builds and sells the Smart, has had almost 17 months of uninterrupted bad news. The launch was delayed six months after a Smart tipped over during a handling test.
Moreover, press reviews were critical of the car's ride and handling. Some customers said they were involved in accidents after losing control on icy roads, and Avis Europe temporarily stopped renting the Smart because of safety concerns.
Eaton said there finally has been some encouraging news. Orders are up significantly as a result of the remarketing effort, he said.
'So right now we're positive,' Eaton said. 'But we have said that if in fact it doesn't meet our expectations, we'll clearly step up to it.'
About 8,400 Smart cars were sold during the first quarter, and the automaker hopes to sell about 30,000 this year, he said.
In reference to first-quarter earnings, Eaton said: 'You clearly have a couple of significant negatives on the (Mercedes-Benz) passenger-car side. Smart clearly is not contributing and is a significant negative to Mercedes-Benz.'