'The original idea behind the very short "smart car" was that the vehicle would be easy to park. It is short enough to allow it to be parked "nose-in" where a conventionally sized car would have to parallel park. Its length of 250 centimetres (98.4 in) equals the width of a regular parking slot, allowing two or three smarts to park in the same space as one normal car if parked side-on to the usual parking direction'.
'The project idea was originally started by Swiss watch manufacturer Swatch and was nicknamed the "Swatchmobile". The name SMART is an acronym for Swatch Mercedes ART. The car was supposed to use innovative features (such as a hybrid engine) and to be an affordable car for young people. Similar to the objective for the Citroën 2CV in the 1940s, its purpose was to "transport two people and a case of beer".
'Being inexperienced in automobiles, Swatch CEO Nicolas Hayek sought an established car maker to produce his Swatch car and found a partner in Volkswagen. Plans never reached a final stage so Swatch teamed up with Daimler-Benz. The purpose-built factory complex Smartville in Hambach, Lorraine, France, Europe was established in 1994 as a joint-venture of Daimler-Benz and Swatch.'
'An Australian dealer web site provides the following summary of the beginnings of the product:
"How everything began: In 1993 Mercedes-Benz started a feasibility study on a subcompact car. Together with the Swatch Group Ltd. they founded the Micro Compact Car AG in 1994. The smart city-coupé celebrates its world première at the IAA in Frankfurt (Germany) in 1997 and is one year successfully launched in nine European countries. By now, the smart is available in 25 countries all over the world and was sold over 750,000 times."
The final car design proved to be far from Hayek's expectations: its engine technology was more expensive than many small 4 and 5 seater cars sold in Europe. The joint venture experienced heavy losses and Swatch pulled out'.
'In 2005, DaimlerChrysler decided against purchasing a 50% share in the Dutch NedCar plant used to manufacture the Forfour supermini. DC also halted development on the Formore and decided to discontinue production of the Roadster.'
'In 2006, after dwindling sales, smart GmbH was liquidated and its operations transferred within the Mercedes-Benz automobile group. It was later revealed that smart GmbH lost nearly 4 billion euros from 2003 to 2006. 
In the same year, DaimlerChrysler announced that it would also cancel the Forfour and redesign the Fortwo to debut in Europe in 2007'.
For a more comprehensive information check out this site.