Smart’s origins weren’t from Daimler, however. The Swiss company Swatch, best known for its avant-garde watches, conceived Smart in the early 1980s. The company wanted to apply the same design and manufacturing processes to tiny city cars it had brought to watches. A hybrid drivetrain was one of the earlier considerations.
Understanding that a Swatch-conceived automobile would threaten existing automakers, the company’s officials sought to partner with an established automaker to develop the car. In the early 1990s, Swatch reached an agreement with Volkswagen to build a Swatchmobile, but the deal unraveled a few years later as Volkswagen decided to support its own small car initiative.
In 1994 Swatch inked a new agreement, this time with Daimler-Benz to produce its tiny cars. Daimler, however, refused to use the Swatchmobile or Swatch Car name, but then compromised by calling it Smart — a blend of Swatch Mercedes Art. At that time, Daimler had a 51 percent stake in the new venture to Swatch’s 49 percent. However, Swatch reduced, then sold its remaining stake before production began.
At the 1997 Frankfurt Auto Show, Smart showcased the City Coupe concept. That concept became a production reality when the first Smart Fortwo models rolled off a French assembly line.
The first-generation Fortwo, a three-door hatchback, never made it to the U.S. market nor did the larger ForFour five-door hatchback. By early in the new millennium, plans for an all-new Fortwo model were underway, with entering the U.S. market also in mind.
The second-generation Smart Fortwo went on sale in the U.S. in early 2008 through a distributor, the Penske Auto Group. Later, Mercedes-Benz took control of distribution, although Smart dealerships are maintained separately from the luxury marque.