According to Britain's Car Magazine, the move was prompted by Renault in order to help trim an R&D budget inflated by costs to develop its own small electric cars, including the Twizy, which is comparable in looks and size to the Smart. Renault will continue working with Daimler to produce a larger four-seater Smart, an updated Forfour, for 2014.
Daimler entered the agreement with Renault after an earlier, similar agreement with BMW broke down. Since then, BMW has formed a satellite company, named simply i, to produce electric cars. The subcompact i3 city car is scheduled to go into production in 2013.
The new Smart Fortwo will be slightly longer and wider than the existing model, and also slightly less eco-friendly, since the diesel motor also is biting the dust, replaced by a normally aspirated three-cylinder, 0.9-liter gas engine. So far, the Fortwo has sold moderately well in North America, where models are priced from $12,490. According to Wards Auto, the top sales market for Smart is China.
A significant percentage of Smart cars in North America are part of Daimler's car-sharing program, called Car2go, in cities including Dallas, San Diego, Miami, Portland, Vancouver, Calgary and Toronto.