DaimlerChrysler's Smart division, producer of a range of stylish compact cars, is in a quandary... its financial outlook for the next few years does not look rosy and development of the ForMore SUV has been halted indefinitely.

DaimlerChrysler's Smart division, producer of a range of stylish compact cars, is in a quandary... its financial outlook for the next few years does not look rosy and development of the ForMore SUV has been halted indefinitely.

Since the brand's launch six years ago with the tiny two-seat City Coupé (renamed the ForTwo), Smart has been draining money from parent company DaimlerChrysler. Reports last week quoted company chief executive Ulrich Walker as saying that Smart would only become profitable in three to four years.

On Monday, however, Smart head of communications Heinz Gottwick contested the report. Speaking to Reuters, Gottwick said, "Walker did not say that. He wants to bring Smart back to profitability as soon as possible."

Meanwhile, plans to expand the brand into the US market appear to have been placed on hold. Eckhard Cordes, head of Mercedes Benz passenger cars, last year called for a review of the Smart division. Currently the brand is sold in 36 markets, and Cordes noted that ensuring the division's profitability was more important than entering new markets like the US and China.

"I am convinced, to fix Smart we have to make sure we operate on a reasonable profitability level in the 36 countries," Cordes says. "If we say, 'Yes, we can do that,' then I see some potential, and then the US might be a market, and China might be another one. But first things first – make sure the core operations are doing okay."

Cordes, who replaced Juergen Hubbert at the start of October last year, has already halted development of the ForMore compact SUV, long assumed to be the vehicle with which the brand would be introduced in the US in 2006. At the recent Detroit Motor Show, the entire Smart line-up was on display with the concept ForMore being the startling omission.

According to Cordes, the review – which was implemented in December last year – will last for a minimum period of three months.

"We have told our suppliers and they know we will get back to them," he said. "For us, this is a very important decision. If it takes four weeks more, then it takes four weeks more."

Original article from Car