Zap Vs, Smart...What is Happening?

FRANKFURT May 24, 2005; Reuters reported that U.S. car customiser ZAP caused a stir on Tuesday by announcing it had ordered $1 billion worth of Smart minicars from DaimlerChrysler, but any deal seemed far from certain.

California-based ZAP, which modifies the Smart car to meet U.S. safety and emissions standards, acknowledged it was still awaiting confirmation that the order would be filled.

The German-American carmaker's Smart division, which does not sell the Smart itself in the world's biggest car market, said it was unaware of any such order.

DaimlerChrysler shares eased 0.3 percent to 32.40 euros by 0850 GMT, slightly bettering an 0.6 percent decline in the DJ Stoxx European car sector index .

"ZAP placed the purchase order directly to the DaimlerChrysler Group in an effort to expedite delivery of U.S. compliant Smart Cars to consumers. ZAP is still waiting for confirmation that smart GmbH will fulfil the purchase order," it said in a statement.

ZAP, which is completely independent from DaimlerChrysler, said it had placed the order after holding talks with Smart officials "to explore the possibility of working together to fill U.S. demand for the Smart Car."

Loss-making Smart has dropped plans to make a sport utility version of the quirky, snub-nosed urban car that was supposed to be its entry model for the U.S. market.

It has held out prospects of selling the next generation of the Smart in the U.S. market from the second half of 2007.