STUTTGART -- DaimlerChrysler expects above-average growth rates for minicars and microcars in the years ahead, which is why it is hanging on to its loss-making Smart business, the head of Smart said on Monday.
"The global market for small cars will grow nearly 4.5 percent a year until 2010," Ulrich Walker told reporters.
Sales of microcars, the smallest category which includes the Smart two-seat model, are set to grow by around 4 percent during that period, outstripping expected annual growth of 2.5 percent for the broader car market, he added.
"This is reason enough to be confident about this market," Walker said, suggesting minicars and microcars would boost their global market share to 50 percent by 2010 from 30 percent now.
DaimlerChrysler has had nothing but losses with Smart since the first urban hipster two-seater made its debut in 1998.
It aims to break even with Smart by 2007 after a drastic cost-cutting drive that narrows its focus to just two models -- the two-seat ForTwo and four-seat ForFour.