Smart Fortwo - Production ended after a good 25 years: Why the Smart had to die

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Electric Smart: Can't get out of the vicious circle

Photo: Mercedes-Benz

In a sense, it was a self-fulfilling prophecy that Smart created in 1998: “reduce to the max” was the claim with which the two-seater, then called the City Coupé, was advertised in TV commercials . Now it is actually being reduced to the maximum, it is being discontinued. The car was produced more than two million times in just over 25 years. The last model is now rolling off the production line at the French factory in Hambach.

The manufacturer doesn't have much to say about it. "According to plans, production of the current two-seater models Smart EQ Fortwo Coupé and Cabrio will end by the end of March 2024," said a spokeswoman for the parent company Mercedes when asked by SPIEGEL. It was not possible to find out exactly on which day the last model was or was manufactured.

What's crucial is that the car that was once supposed to trigger a revolution in the car world is now history, and many fans are mourning. How could that happen?

It all started so hopefully. “In principle, Smart created a new vehicle class with its two-seater at the end of the 1990s,” says Stefan Bratzel, director of the Center of Automotive Management in Bergisch Gladbach. With its initial length of just 2.50 meters, the Smart was a stark alternative to the “eternal higher, faster, further” of the auto industry and the resulting SUV boom. The ability to maneuver the small car lengthwise and crosswise into even the tightest parking spaces made the car the ideal city vehicle.

However, the Smart model had reputation problems from the start. “The small two-seater was not perceived as a fully-fledged vehicle,” remembers Bratzel. Many people were not prepared to pay the (relatively) high price of the vehicle. In 1998 it was just over 16,000 marks. A lot of money for a vehicle that was supposedly reduced to the bare essentials. 45 hp, unpainted rear panels, no air conditioning – the starter package in the “pure” equipment variant lived up to its name all too much.

There was no big rush on the car. The Smart was not profitable. »The production costs per vehicle were too high. “From the very beginning,” says Bratzel, who himself worked for Smart in the early days and was responsible for the Webmove project: a function with which Smart was the first car manufacturer to set up Internet access in the car via cell phone, for example to find nearby parking spaces, Car washes or hotels can be found.

Bratzel worked on the dream of a small, inexpensive, electric city car: At the time, that was the vision of the now deceased Swiss entrepreneur Nicolas Hayek, founder of the Swatch watch company. At the beginning of the 1990s, he pushed forward work on the “Swatch Mobile”, the forerunner of the Smart fortwo.

A later switch to electric drive didn't bring any change

First, Hayek tried to implement the project together with Volkswagen, then Daimler came on board as a development partner. The development costs are constantly increasing. Eventually the electric drive had to go. Hayek withdrew from the project. But in 1998, series production of the two-seater began at the specially built factory in Hambach, France.

The Smart won't be a real success story. The Smart product range was supplemented by a roadster in 2003, but this was canceled after two years at the insistence of the parent company. In 2004, the Smart forfour was added, which was also discontinued after two years before being brought back into the range in 2014.

Even the realignment in 2019 as a purely electric brand no longer saved the fortwo. Smart was relaunched as a joint venture between Mercedes and Chinese car company Geely in the same year. People now thought big, literally. Smart is now building SUVs: the Smart #1 will start in 2022, followed by the #3. Both are manufactured in China and both are fully electric. The electric drive is probably the last remnant of the original idea from which Smart once emerged.

Is the end for the tiny little thing a logical, almost inevitable decision? In fact, the number of large SUVs has also increased in Germany over the years. And that despite the fact that on average there are not even two people in a car in this country.

However, many customers apparently don’t care about such considerations. “The argument of reason will not convince a buyer to buy a small vehicle,” says Bratzel. It's more about creating desire for such a small car. With successful design and emotionality.

It wasn't just Smart who failed in the end. In Germany in particular, several manufacturers have tried unsuccessfully to inspire the mass audience with completely new cars.

For example, the Baden-Württemberg company Hotzenblitz from Ibach im Hotzenwald. It caused a stir in the 1990s with a small electric car, but after years of back and forth it finally gave up because production costs were too high. In the 2010s, the company E.Go, founded in Aachen, got tangled up in its own ambitions with the electric dwarf Life and went from one insolvency procedure to the next. The manufacturer only filed for bankruptcy again at the beginning of March this year.

There are also start-ups like the company Adaptive City Mobility from Munich, which had to close down after just a few months with the ACM One, an electric stroller with portable removable batteries introduced in 2021. A three-digit million sum was already needed.

Money that large corporations like Renault, Mercedes and Volkswagen have. But they are also finding it increasingly difficult, even in the slightly larger small car segment. The increased safety requirements, for example assistance systems required by the EU and the sensors and corresponding hardware required for them, made the production costs of the vehicles more expensive.

New two-seater from China could come in 2026

The manufacturers passed the additional costs on to customers, and prices continued to rise - by 35 percent in the small car segment from 2017 to 2023. Vehicles such as the Renault Zoe and the VW e-Up were becoming less and less profitable for manufacturers. New EU cybersecurity requirements would have further increased costs. Renault and VW subsequently withdrew the two small electric vehicles from circulation in order to escape the death spiral.

And new affordable electric entry-level models from established manufacturers are - with a few exceptions such as the Citroën ë-C3 - still future projects. “An electric Smart fortwo at a reasonable price would actually be exactly the car that mobility needs now,” says Bratzel.

Smart probably doesn't want to give up the idea of ​​the small city car completely, even under the new Chinese leadership. At least the Smart #2 was announced as the successor to the fortwo. It is scheduled to come onto the market in 2026 – made in China. Technical data, let alone a price, are not yet known. It is therefore completely unclear whether the car has a chance of long-term success.