Mercedes-Swatch Car Due in a Year--Is Timing Right?

From Associated Press

The clock has started ticking for the arrival of the colorful, inexpensive Swatchmobile, which goes on sale in a year.

The peppy two-seater--from the manufacturer of some of the world's most expensive cars and the maker of some of the cheapest watches around--will no doubt raise eyebrows with its chameleon-like features. But it enters a small-car field crowded by some of the auto industry's biggest names, which could make sales difficult.

The Swatchmobile--formally known as the Smart--is the product of an unlikely joint venture between Germany's Mercedes-Benz and Swiss watchmaker Swatch.

Mercedes-Benz announced Friday that the vehicle will go on sale in Europe in April 1998 for the equivalent of $9,400 to $11,600, with 100,000 to be made the first year. There are no plans to sell it outside of Europe.

"It's difficult to see who's going to buy it," said Graeme Maxton, associate editor of Economist Intelligence Unit automotive publications in London. "They're aiming at young professionals and students. It's clearly for use in an urban environment."

Swatchmobile buyers can purchase a special kit with different brightly colored body panels to change the shade and shape of the car to suit moods, clothes or special occasions. But despite its unique appearance, it will still face competition in the growing subcompact car segment in Europe known as sub-B.

Ford and France's Renault have sub-B models out already, and Germany's Volkswagen and Italy's Fiat have models on the way.

"All are meant to be low-cost city runabouts. The Swatchmobile is going to have to compete against the big boys," Maxton said.

"The fact that it's a new car company and has a Mercedes association could give it added benefit," he said. "But the danger for Mercedes is that it undermines its brand and could confuse customers."

The Swatchmobile will get more than 60 miles per gallon, can zip around town at up to 80 mph and, at only 8 feet long, can squeeze into tiny parking spaces.

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