The original city car brand was born in 1994. The original idea belonged to a watchmaker. Swatch CEO, Nicolas Hayek began developing the concept in 1982: a new small and stylish city car that would use the same type of manufacturing and personalization features as the Swatch watches.
He began to design the first Swatchmobile, as it was known, but sought to cooperate with a big car company. An agreement was reached with Volkswagen but the cooperation was terminated for fearing of competition with the VW Lupo. Talks were held also with BMW, Fiat, GM and Renault, but in the end Mercedes-Benz agreed to build the car.
The Smart name was born from this collaboration: Swatch Mercedes ART. A new plant was built in France and the first Smart cars rolled off the assembly line in 1998.
Smart ForTwo redefined the city car. It was spacious for two persons, and very easy to use in the city. It had also some problems: it was expensive and the gearbox was sluggish.
Smart expanded the range with the ForFour, a rebadged Mitsubishi Colt, and a rear-engined Smart Roadster.
Smart was in financial trouble between 2003 and 2006, and in the end, Daimler bought the MCC participation. Smart operates today under the Mercedes-Benz Cars division of Daimler AG.
The new generation of ForTwo and ForFour model was developed in collaboration with Renault, and the ForFour is sold also by the French brand as the new Renault Twingo.