Juergen Schrempp: There is no clear path for Smart.
Schrempp's comments, made on March 11, contradict Mercedes-Benz car group CEO Eckhard Cordes and Smart CEO Ulrich Walker. Both have said that closing Smart was not an option.
"We are known for unpopular decisions," Schrempp told a small group of financial analysts on March 11, according to two analysts who were present. But he emphasized that the decision to close Smart has not been made.
DaimlerChrysler has halted development work on the ForMore SUV, which it planned to use to introduce the brand in the United States. Smart has signed up as many as 80 U.S. dealerships, which would have begun selling vehicles in September 2006.
Schrempp said that while DaimlerChrysler knows how to fix Mercedes-Benz's problems, there is no clear path for Smart, analysts said.
While Smart says the halt in the development of the ForMore is temporary, suppliers and analysts are pessimistic.
"As far as we are concerned, the vehicle is dead," said a supplier who requested anonymity.
Schrempp promises a decision on Smart's future at the end of April. But insiders believe an announcement could come as early as the shareholder meeting on April 6 in Berlin.
The financial community favors killing the brand. Reports by several investment houses expect DaimlerChrysler's stock to rise if Smart is killed.
A DaimlerChrysler spokesman denied that Schrempp said Smart's future is in doubt, adding that closure of the brand is "out of the question."
Schrempp identified the ForFour hatchback as the brand's problem child. Analysts said Schrempp pointed to DaimlerChrysler's decision not to acquire 50 percent of the Mitsubishi plant that builds the ForFour as a hint of DaimlerChrysler's plans for Smart.
DaimlerChrysler earlier had agreed to acquire one-half of the NedCar plant in Born, the Netherlands, which also produces the Mitsubishi Colt.
The ForFour, introduced last April in Europe, sold a total of 9,600 units in January and February.
Last April, then-Smart CEO Andreas Renschler, now head of DaimlerChrysler's commercial vehicles division, said his goal was to sell 80,000 units in 2005.