The ForFour is the first Smart four-seater since the brand axed a previous ForFour after just two years of disappointing sales.
The ForFour and ForTwo will go on sale in Europe starting in November. Daimler has no current plans to sell the ForFour in the United States because it isn't sure if there is a big enough market to warrant the cost of homologation.
Daimler is counting on the ForFour to boost Smart's volume and make the brand more profitable. Smart's global sales fell 10 percent to 46,816 in first half.
In the United States, Smart's first-half sales rose 4 percent to 4,647 vehicles.
Daimler said it expects one-third of Smart sales to be ForFour models.
The previous-generation ForFour was based on the Mistubishi Colt. Daimler has teamed up with Renault for the new ForFour to save development costs.
The new Smart shares its rear-wheel-drive underpinnings with the Renault Twingo. Both minicars will be built at Renault's factory in Slovenia. The ForTwo will continue to be built at Smart's factory in Hambach, France.