Hi! Welcome to the Optional Extra video for the Smart Fortwo. When I first started making these
car videos they were like 10 minutes long and the Smart video now was 30 minutes long, and this
Optional Extra is going to be long as well! So, everything just seems to be expanding. But there's
lots of interesting stuff that I find when I look at these car histories, and it's hard to fit it
all in. So, everything just keeps expanding. Anyway, the first thing I’d like to talk about
is not the Smart car but actually the Swatch brand and what happened to Swatch, because
Swatch was actually quite an interesting story in itself. There's a YouTube channel called
“Company Man” and I actually sent an email to this to the guy making those videos. He does
videos about company history, and said you should do Swatch. It's really interesting!
So, in the 1970s Swiss watchmakers were mainly making traditional mechanical watches. That's
what they've been making for decades. They'd been making them throughout the Second World War
and no one else was making watches during the Second World War. So they sort of monopolised the
market. And then they became the de facto place to get watches, and in fact by the 1960s Switzerland
had 50% of the watch market. But things started to change in the late 60s. In December 1969 Seiko
came out with the first quartz watch, and then of course in the late 70s and throughout the
70s we got LED digital watches and then of course LCD digital watches, and these were
just taking over the market. They even gave it a phrase - it was the “Quartz Crisis”. It
wasn't just digital watches, it was also quartz watches that were just taking over the market.
So Swiss watchmakers saw this whole quartz and digital thing as a bit of a fad and continued
to make their mechanical movements. That led to two major companies going bankrupt in 1982,
and that included the brands for Longines, if I’m saying that right, Omega and the Tissot brand.
So the Japanese companies wanted to buy those companies originally,
but really just for the brands. They didn't want the companies themselves because they saw them
as outdated. They wanted those brand names which of course were still worth quite a lot
of money. But there was value in the companies beyond just the brand names. One of the firms
had made the switch to quartz and had actually patented a way of making very thin watches. So,
the man that rescued both of these Swiss watch companies was a guy called Nicolas Hayek who'd
been a respected manufacturing consultant to many of the Swiss watch companies in the 1970s. He did
a deal with the banks to take over both companies and to take them private. So, being someone who
rationalised companies, the first thing he did was rationalise the production process
so that these companies were now using 1/3 of the parts that they were using before to make watches.
It was now obviously much cheaper to produce watches, but they realised that they could never
compete with the Japanese companies on price. Japanese labour was far cheaper. So they used the
fact that they'd switched to quartz watches, this one company had already switched to quartz watches
and that patent for making extra thin watches. They decided to just go with that and run with it,
and then of course turn their watches into fashion items. So that's where the whole Swatch brand is
created, and they eschewed this whole digital LCD craze which by the mid-80s - it had a
presence but it has certainly gone down a lot from the late 70s / early 80s where everyone was buying
LCD watches because they were the latest craze. There's of course the bit in “The Hitchhiker's
Guide To The Galaxy” where they talk about people - ape men are pretty clever because they've
managed to work out how to make digital watches. And it really was the case. Digital watches were
massive in the late 70s / early 80s, and everyone was buying them. Even as high-end fashion things,
which of course seems rather odd now. People have moved to analogue watches and things like that.
Anyway, so they realised don't compete on price, compete as a fashion brand. And by having all
these different fashionable watches people would go out and buy several different ones,
and indeed that of course came to happen. And some of these designs from way back when, from the 80s
and 90s can go for up to $20,000 now. These were originally $50 watches, and because they
are relatively rare now people still have a big demand for some of these watches. So, by the 1990s
Switzerland is back to over 50% market share. Anyway moving on to the Smart car story. The
Swatch team, when they're originally starting to create this car they approached FIAT, BMW,
Renault, General Motors and Chrysler, and every single company said “No,
we're not interested”. Volkswagen of course agreed to work with the Swatch people, but even then
they decide that it's not really the right way to go. They create their own fuel efficient city car,
the 1999 Volkswagen Lupo 3L. 3L stands for the fact that it can do three litres per 100km
which is about 94 mpg on the combined cycle. If you do it at a steady 56 mph it gets even
better fuel economy. And so they create a car that's very fuel efficient but it's not
so much compromised. It's a 61 hp engine (which is 45 kw) that gives good acceleration - 14½ seconds
and a top speed of over 100 mph. It's a regular car with four seats, but it's much more fuel
efficient of course. It has lower drag than the Smart City Coupé - 0.29 versus 0.34.
So if you look on paper it's a much better car. It's more practical,
it's a more fuel-efficient car and of course it's a mass market car, which is what Volkswagen
want to do. They don't want to go for niche plays, they want to go for the mass market.
And of course in that sense they were probably right to get rid of the whole Smart deal
and move into something else. But the Volkswagen Lupo, for all its cleverness, for fuel efficiency,
it doesn't have the character and charm and the fun image of the Smart two-seater.
So, Nicolas Hayek's Swatch team butted heads with both Volkswagen and then when they joined
with Mercedes they ended up butting heads with them as well. I think the problem was that
before they did the agreement obviously both sides weren't talking about what they wanted
from the car, about the future of the car, and the things that they found important. And
the Swatch team failed to do this not just once - but twice! So, they were obviously at fault that
they were going to deals and not really realising what they should be doing. I think the people
from Swatch and particularly Nicolas Hayek were used to getting their own way and so they just
thought that they could do what they wanted, and essentially Volkswagen & Mercedes would just
provide the funding and also provide some of the car know-how, and they would provide the creative
side of it. But the problem one of the things I didn't really understand with Nicolas Hayek was
when they were trying to create this the Smart brand and they were looking for the brand name.
He wanted it to have the Swatch name in it in some way. But Mercedes owned 51%
of the shares of the company. They wouldn't want to use the Swatch name in any way because they'd
have to use that brand name in perpetuity, and they would have to license it at maybe a heavy
cost from the Swatch company. Why would they want to do that? They want to have complete control.
So, the Swatch founders wanted to have both hybrid and electric cars, but in the early 90s
this was really impractical particularly for German and Swiss companies that weren't investing
a lot of money in that technology. They were still using lead acid batteries which had a short range
and were very heavy. They still didn't have the innovations in motor technology which had come
by General Motors when they did work in the late 80s early 90s to create some amazing
innovations in motor technology that didn't need a gearbox. So when the Swiss team decided
that they were done by the whole Mercedes thing and they go off to make their own car,
this thing called the Cree Sam, it only had 43 miles range. It was using lead acid batteries. It
only had a 52 mph top speed and nobody wanted that sort of thing. It was a tiny car with two people
behind them. No one really wanted a car like this. So, when the Smart cars release they produce all
these different commercials, but I was going through the commercials - most of them are very
low quality. One of the problems I have with a lot of car histories is you go back to the 50s and 60s
and you can get really good quality commercials and development videos and things like that,
because they're taken from film stock and then they've done a high quality transfer, and
the videos you get are quite good. And then you hit the 80s and the 90s and even the 2000s where
they've transferred these adverts from low quality video tape, and they're just awful. So,
you get this period where things are terrible and then in the last 10 years things start getting
better because they're just digital transfers and everything's 720p or better. But anyway,
the commercials that they did in the 80s, 90s that are really low quality. So,
in the 90s and 2000s that are really low quality they just don't look very good, and maybe that's
why sales weren't doing very well. They didn't really do a good job of trying to sell their
car. If you compare that to the MINI and the Beetle, the marketing for those was very good.
So, by the late 1990s Nicolas Hayek and all of the original Swatch team had had enough
of the whole Smart thing. They don't think the car company's going the right direction,
it's sort of become a Mercedes project at this point, and if you look on Smart's
website pretty much all of the whole Swatch origin thing has just been pushed to one side.
It's really all about Mercedes small car history. They talk about the NAFA concept in the 1980s and
things like that, and the whole Swatch thing is just sort of pushed to one side.
So then we get to the mid-2000s and Smart is trying to expand its range particularly to
get into the US market, and so they're producing the Smart Formore SUV, and there were a couple of
images which I found. But there were several other images which I couldn't use because they were on
another website and they're not things I own, but somebody discovered a whole load of the prototypes
in a garage and I'll provide a link in the description so you can go and take a look at those
images because they're really quite fascinating. Some of the things that they were trying to do
and actually show sort of real cars that were very close to going into production.
Then of course in the late 2000s Smart eventually produce a hybrid but it’s what they call a “Micro
Hybrid” which of course isn't a hybrid at all. It just does sort of start/stop technology which
many companies were doing at the time. But they weren't the only company to try and use this whole
Micro Hybrid brand name. Ford also did it with the Fiesta, and part supplier Siemens VDO made the
technology and were also using that same brand name. So, then we get to the 3rd generation car in 2014
and it makes sense for Smart to work with other companies to try and share development
costs - Renault in this case. But it also made sense to merge the platform for the Fortwo and the
Forfour. The Forfour is really just a stretched version of the Fortwo. This of course meant that
the Fortwo could be a little wider which is good if there's more elbow room in the car, but it also
makes it slightly harder to park because it's a little bit wider. But it would have been tough to
have the Forfour as such a narrow car because it's a four-seater. Both the front seats and the rear
seats would have to be offset which would have been a very strange situation for a four-seat car.
So, with Smart making cars in France and Renault being a French company you would have thought that
the Twingo and the Smart Fortwo and Forfour were all made in France, but actually the Twingo was
made in Slovenia. So that's confusing, but I guess that's what Renault was starting to
do. They were starting to take more production and take it outside of France for cost reasons.
So moving the Smart brand to be purely electric was probably the right move, at least for Smart.
They're a fairly small car company, the cars they use are for short commutes, it simplifies their
production so they only have to make one type of car, there's only one type of drivetrain.
It's also the way that things are going in the late 2010s and it would make the Smart brands
stand out as being purely EV, and Smart really needed to stand out because they were starting
to become overlooked. But the Smart electric cars that they made only had like an 80 mile range, and
that's hard (to sell). Nissan's Leaf had a similar range and people are moving to
cars that have much larger EV ranges - 200 to 300 miles is becoming the norm now.
Of course in the late 2010s they had the funky interior and then a few years later they ditch it and
only have a black interior. Maybe that's because no one was buying their funky interiors and we
all seem happy now with boring black interiors, and white, black and silver cars. But
at the end of the day a car company just have to chase what people are buying, and so maybe that's
why they decided just to go for a black interior. So one last thing. The Smartville factory
which has been making Smart cars for years and years. Obviously production now is all going to
go to China and all the cars are going to be made there. So, that factory in France is now
empty. It's been sold off to Ineos who are going to make their modern version of the
Land Rover Defender - the Grenadier. So, we'll see how that happens - whether that's going to
be a success or not. Anyway, thanks for watching the Optional Extra video. Thanks
for getting through all of this content that I’m producing, and I'll see you in the next video!