German-US auto giant DaimlerChrysler hopes to turn around its loss-making Smart unit by establishing a close partnership between the ultra-small car and French car maker Peugeot, the
Süddeutsche Zeitung reported on Wednesday. The newspaper quoted sources close to DaimlerChrysler as saying the car maker hoped to work together with Peugeot to develop two- and four-seater small cars. However, a spokesman for Smart dismissed the report as "completely false" and "totally unfounded."
Süddeutsche Zeitung also said that DaimlerChrysler would, in the mid-term, end its cooperation with Japanese maker Mitsubishi Motors (MMC) which builds the four-seater Smart in the Netherlands and the Mitsubishi Colt. But that information was also wrong, the Smart spokesman said. "Our joint projects are doing very well. There won't be any separation from MMC," he said. The newspaper said DaimlerChrysler was looking for a partner for the Smart car because unit sales are not sufficient to achieve favorable production costs at present.
Süddeutsche Zeitung said the Smart division would run up a loss this year of more than €400 million ($520 million).