Daimler Corporation’s reported in 2008 after 10 years of ill-advised moves and a bad business plan the their oil leak may have stopped and for the first time since the brand’s inception in 1998 the eco brand Smart according to Wolfgang Schrempp turned a profit. Or so says them.
In 2005 only 7 years after the smart cars launch, the German carmaker smart had racked up losses totaling nearly 3.5 billion, yes billion.
They would like the public to think they turned the smart brand around with smart sales. However that’s not the case. The main reason for the move to black was due to drastic scale back within the troubled Smart division, eliminating two models and cutting 700 jobs, at a cost of up to $1.55 billion.
The company considered shutting down Smart altogether, but concluded that this salvage plan, which aims to make Smart profitable by 2007, would be less costly.
Schrempp revealed the brand’s move into the black with the launch of the second generation fortwo in Sydney. Schrempp went so far as to says he admits made some mistakes “overestimating customers” were made. 3.5 billion is a fairly big overestimation!
They failed to mention the Smart’s high production costs, because of the bad decision to manufacture the car in France and cumbersome distribution network, which had been kept separate from existing Mercedes dealerships.
So guess what their first business move here was to separate the smart fortwo from existing Mercedes dealerships giving the Penske Automotive Group the distribution rights for the USA. The Penske Automotive Group failed miserable and Daimler finally gave Mercedes Benz USA the sales, distribution and marketing rights.
Their experience in Canada was extremely encouraging, regarding acceptance of the smart.
However, Mercedes Benz said the plan to make Smart profitable did not hinge on bringing it to the United States. But that the U.S. provides an additional opportunity, 
a significant opportunity,”
All of this was an easy solution for them, and a bad solution for shareholders.
Daimler’s efforts to expand the Smart brand have misfired. A roadster version sold poorly, and was widely derided by auto critics as looking like a toy. Their smart forfour was a flop and has been responsible for most of Smart’s losses and considered building a sport-utility vehicle – viewing it as an entry model for the United States. To critics, that seemed to fly in the face of Smart’s appeal as a compact.
