Detroit: Daimler AG's two-year effort to win over US drivers with a thrifty, plastic-clad minicar is running out of steam, adding urgency to the German automaker's effort to find a partner for the Smart brand.

The US debut of the urban two-seater is floundering after a promising start in 2008, when North American sales propelled Smart to its first profit. With just one model, the "ForTwo," US sales plunged 41 per cent to 14,600 cars last year, more than the 15 per cent decline by Daimler's Mercedes-Benz.

"Smart's not a car in the traditional sense, it's a high-style alternative to public transportation," Jim Hall, principal of consulting firm 2953 Analytics who has worked with General Motors Co and Toyota Motor Corp on model development, said. "The problem for Smart is that fashion tends to be fleeting."

Smart's fading fortunes in the US highlight Daimler's need to find a partner to expand the model lineup and lower costs as it commits $2 billion (Dh7.4 billion) to boost compact car offerings.

Talks with Renault

The manufacturer is in talks with Renault SA and other carmakers on potential "close-knit" cooperation, CEO Dieter Zetsche said on December 17.

"The lack of success in small cars has been a big strategic weakness, and Daimler likely needs a partner to turn things around," Stefan Bratzel, director of the automotive institute at the University of Applied Sciences in Bergisch Gladbach, Germany, said.

The brand sputtered with new models, and consumers favoured Bayerische Motoren Werke AG's Mini. There are better-value alternatives to the ForTwo, which starts at $11,900, Hall said.

Smart's weakening in the US accelerated in the fourth quarter, when sales totalled 2,174, a 66 per cent contraction from a year earlier. BMW's Mini had 10,229 US sales in the period, a decline of 24 per cent. In December, Smart sales were lower than GM's Saab, which is in the process of being closed or sold.

"Smart is very important for Daimler," Bratzel said. "If you want to survive as a global carmaker, you need small cars because that's where the growth is, especially in markets such as India and China."

At the Detroit auto show, Smart will introduce a "chrome yellow" special edition and present a car-sharing project piloted in Austin, Texas.