How smart is this? DCX lost €3.9 billion on Smart over four years


DaimlerChrysler stock has soared ever since news hit the street that a Chrysler sale was imminent. After all, Chrysler lost $1.5 billion in the 3rd quarter of 2006, and the Germans were convinced that the Pentastar was the root of all their problems. Now comes word from German newspaper Handelsblatt that DCX dropped a cool €3.9 billion on the Smart brand in only four years, which puts the microcar brand in Jaguar-bad territory. Since DCX doesn't break out profits or losses for Smart, Automotive News reports that Handelsblatt came up with the figure after obtaining the information from liquidated Smart GmbH in Böblingen, Germany. How could such a small, cute little vehicle cause so much financial heartache for the brilliant German luxury automaker? We don't know, but it'll be interesting to see if DCX shareholders react to this news like they did Chrysler's losses. We'd also like to know whether Daimler sought any advice or help from value brand Chrysler on how to produce a vehicle inexpensively, but somehow we doubt it.

[Source: Automotive News (subscription req'd)][/align]

 

Not so Smart after all

 

"How could such a small, cute little vehicle cause so much financial heartache for the brilliant German luxury automaker? "

Because no one here in america wants ugly, slow, useless deathtraps like that!!!! Several dealerships here in Portland are infested with those things, and have been since I got here 9 months ago. Any guesses on how many Ive seen out and about on the roads in this time?
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2!!!!! Thats right. Only 2 of these that Ive seen actually on the road. Gee whiz, I wonder why? Prolly because anyone who has $12K to drop on something tiny that gets 60 mpg has already figured out that $8K will buy a spankin new motorcycle thats a hell of a lot more fun to ride and will stand up about as well in a collision...

 

The only reason you've only seen 2 of them is because they are not available in the US yet, they are in Europe and Canada and very few have been brought here from one of those places. The Smart will become available here in the US in early 2008.

Like the whole DCX merger, Dumler used Chrysler by taking Chryslers money and putting it into Dumler Benz. Dumler improved Chryslers luxary and fit and finish, but they also used them as an excuse for their own declining sales even though they see-sawed back and forth. Dumler used Chrysler much like a vampire would used a random victim, they sucked the life and money out of them and left them for dead.

 

I have never seen one

 

No way. Re-read my post. They've had those things warming the lots ever since I moved here 9 months ago. Maybe longer.

 

You'd need a death wish to drive one of those things around here..........

Dusty

 

I think those things would be great for urban intowndriving, but I would not use this too much for long trip use.

 

The real question should be who cares at this point. Chrysler has a fresh start and will be able to stand on it's own merits. Daimler used Chrysler for better domestic (U.S.) identificationwith it's (Mercedes) brand not Chrysler's. Now they can eat crow as Chrysler continues to grow as long as they keep introducing exciting and innovative product.

 

I saw one of those Smart cars around here outside of a business... the thing was half the size of my Neon.

Unlike Ford or GM, DCX restructured the Chrysler supplier chains way back in the summer of 2001, in anticipation that money would get tight, and they wanted their suppliers to be competitive so they didn't lose money down the road (like how GM and Ford did).

I also remember a couple years back reading about DCX admitting that the Chrysler products were doing well, and the oversees Mercedes sales were down over 45%, which attributed to the loss of overall profit for DCX. I wish I could find that article again...