Zetsche extraordinarily optimistic about SMART

http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID 05-09-02T112316Z_01_EIC241011_RTRIDST_0_BUSINESSPRO-AUTOS-DAIMLERCHRYSLER-ZETSCHE-DC.XML

New Mercedes boss plays down idea of ditching Smart
Fri Sep 2, 2005 7:24 AM ET
FRANKFURT (Reuters) - DaimlerChrysler's (DCXGn.DE: Quote, Profile, Research) designated Chief Executive Dieter Zetsche expressed confidence in the future of loss-making minicar business Smart as he took over personal control of Mercedes Car Group.
"I am extraordinarily optimistic that Mercedes Car Group is on a fast track higher. I am equally optimistic that we will make progress with Smart along the way," he wrote in a memo to staff of the German-American automaker's premium car division.
"We have brands that are the envy of the entire industry, we have products that we can rightly be proud of, and we have in all areas staff whose competence and ability is second to none," he added.
The company released the letter on Friday, a day after Zetsche left U.S. arm Chrysler to run Mercedes for an unspecified period.
He replaces group CEO Juergen Schrempp at the turn of the year as well.
Mercedes Car Group includes the Mercedes-Benz, Smart and Maybach luxury limousine brands.
The financial community is watching eagerly to see what steps Zetsche has in mind for Mercedes, whose operating profit has plummeted amid model changeovers, a strong euro, spending to fix quality problems and hefty losses at Smart.
The market wants to know whether Zetsche, 52, will simply tinker with predecessor Eckhard Cordes's plan to revive Mercedes profits and margins by cutting costs and boosting revenue, or whether he will take a more radical approach.
Some analysts have suggested pulling the plug on Smart, which has not made a profit since its debut in 1998 and is slated to break even only in 2007 despite sweeping job cuts and a narrowing of the quirky city car's model lineup.
It lost nearly 4,000 euros on each car sold last year.
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1) I hope the radical approach means seeing a quality increase as a way of cutting costs.
2) Time to buy a Smart, before its price rises by EUR 4K....
DAS
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If Smart enters the US market, they should do so with the 70mpg bionic car they demonstrated a while back. That car is different enough to not really fit with the other divisions. That would sell well.
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