Engage reverse: a brief history of the smart fortwo

This SHARE NOW mini-series has been all about taking a look back at the stories behind some of the most iconic cars in our fleet. From the MINI to the BMW i3, we’ve delved into the people and the unique set of circumstances that made these cars as groundbreaking as they were.

In this latest episode of Engage reverse, we’re digging deep into one of the most unique cars ever made, with one of the most bizarre origin stories in automotive history. The original microcar from smart also played a huge role in the history of SHARE NOW. Here’s a brief history of the smart fortwo.

It all started with… watches

The story of how the smart car came to exist does not start with a car manufacturer at all - it starts with a watchmaker. The company behind Swatch, the highly customisable watch brand, started working on an idea to build a car as early as 1982. Swatch’s CEO at the time, Nicolas Hayek, wanted to make a car that was as customisable as its watches. They called it the Swatchmobile. The name didn’t stick, but Hayek began pitching the idea to car manufacturers and by July 1991, he’d struck a deal.

© Image: Analia Baggiano / Unsplash


From Volkswagen to Daimler-Benz

SMH, the company behind Swatch watches, struck a deal with Volkswagen in the summer of 1991 to share the development of this new ‘Swatchmobile’. However, the project hit a stumbling block almost from the start. VW installed Ferdinand Piëch as its new CEO in 1993, and rumours started circulating that Piëch was ready to ditch the project. Hayek began floating the idea to other manufacturers. Fiat and Renault passed, but Daimler-Benz AG (now Mercedes-Benz Group AG) were keen and an agreement was made.

© Image: Newsroom smart Europe GmbH

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The birth of the smart brand

By March 1994, SMH and Daimler-Benz had partnered on the project and the formation of Micro Compact Car AG was announced at Mercedes-Benz headquarters in Stuttgart. Three co-directors were installed to run the company; Johann Tomforde, a Daimler-Benz designer and engineer, Christoph Baubin, a financial boffin from Daimler-Benz, and Hans Jürg Schär, the marketing man behind the famous Swatch campaigns of the 1980s. They came up with the name smart, which stood for Swatch Mercedes Art. The acronym had been used internally for some time and had stuck.

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The smart fortwo is launched

The first generation smart car - internally dubbed the W450 but marketed as the smart fortwo - launched at the 1998 Paris Motor Show. The microcar experienced successful launches in nine European countries later that year. At just 2.5 metres in length, the smart fortwo was the ultimate urban car for squeezing into tight spaces and it became famous for being able to park perpendicularly in spaces designed for parallel parking. The original design would remain in production until 2007, but it was not exactly a commercial hit.

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The smart car range expands

The first generation smart fortwo has turned heads in cities all over Europe but had been somewhat of a commercial flop. The second generation of smarts, which featured not only a new and improved fortwo but a rear-wheel-drive roadster and a four-seat version, aptly named the forfour, set about changing that. The expansion was not enough to get the brand into the black though. Reports suggested Smart GmbH lost nearly four billion euros from 2003 to 2006. Smart GmbH was eventually liquidated and its operations were absorbed by DaimlerChrysler.

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Car-sharing and the rebirth

The original smart fortwo may have been too far ahead of its time to be a commercial success, but thanks to a couple of new innovations, the OG microcar was about to make its comeback. Formal testing of a brand new, all-electric smart fortwo ED began in London in 2007. By 2009 it was available in 18 markets around the world. The pioneering car-sharing service, car2go, expanded smart’s reach into 26 cities in Europe, North America and China. By now, an electric smart forfour and cabrio version of the smart fortwo were also available.

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smart heads east to China

By the end of previous decade car-sharing services like car2go and then SHARE NOW have brought smart cars to urban dwellers everywhere, but the brand was ready for the next chapter in its history. In 2019, Mercedes-Benz joined up with Chinese firm Zhejiang Geely Holding Group to establish smart Automobile Co., Ltd. The goal was to produce smart cars in China to be marketed globally. Headquartered in Ningbo, the organisation clearly has big visions for the future. At the IAA 2021 the smart concept #1 was unveiled - looking every bit as futuristic as the first fortwo.

© Image: Newsroom smart Europe GmbH

Like all of the cars in this Engage reverse series, the original smart fortwo, and the models it inspired, changed the automotive industry forever - and for that, it deserves to go down as an icon in our book. It may not have been a master of modern engineering like the BMW i3, or a cultural classic that transcended class and even generations like the MINI, but the smart fortwo did change the way we look at cars in our cities. It inspired the car-sharing model we see today at SHARE NOW. It changed the way people think about urban mobility, about what a car can be. Forever instantly recognisable and adorable, that’s our smart car.

David McCourt

David McCourt

Sr. Editorial Content Strategist

"Own less, share more."

David is on a mission to improve the quality of life in cities through modern mobility solutions.