Smart is Daimler's automotive branch dedicated to making small, fuel-efficient cars, called microcars. The company produces its vehicles in both Germany and France, and is denoted as "smart" (lower-case) in marketing campaigns. The brand is often apt to tout its ability of "forward thinking." The Smart brand's development can be traced back to the late 1980s, although it wouldn't be officially established until 1994.

In the 80s, SMH watchmakers began developing and creating an idea for a new kind of vehicle, using the same strategies and unique personalization used in marketing its watches. SMH's CEO, Nicolas Hayek, had the idea that the auto industry had largely ignored a huge part of the population that desired a small, stylish car that could easily navigate its way through the city. His idea was soon named the "Swatchmobile," and his company began working in tandem with Hayek Engineering AG to bring the new car to life. The first "Swatchmobile" was designed with a hybrid drivetrain and the capability of seating two. When Volkswagen received information about the new little car, the company was intrigued and the two joined forces. However, VW's CEO at the time didn't want the affiliation with SMH, due to the fact that his company had already been working on its own small three-seater. So, Hayek began working with other companies secretly. He was turned down by Fiat, BMW, GM, and Renault, but an agreement was finally reached with Daimler-Benz AG, maker of the Mercedes-Benz brand.

In 1994, the deal was made official, and the company originated as Micro Compact Car AG. The company was split in two pretty evenly as far as stock was concerned. The press conference called on behalf of the merger introduced two concept vehicles: the eco-speedster and the eco-sprinter, both designed by a California studio owned by Mercedes-Benz. the SMH company was pretty vocal about the fact that it wanted some variant of "Swatch" in the new brand's name, but the two groups finally settled on "Smart," due to an acronym that had been used inside the company to represent Swatch Mercedes Art.

Smart has had several models in production from 1998-present. From 1998-2000, the Smart City-Coupe was produced, and it was shortly joined in 2000 by the Smart City Cabrio. In 2002, the Smart Crossblade was introduced. From 2001-2004, the Smart K was produced in Japan, and from 2001-2007 the Smart City-Coupe and City Cabrio appeared again as redesigns. In 2004, these models had their names replaced with "Fortwo." In 2002, the tiny Smart Cross blade was produced, and from 2003-2005 the Smart Roadster took to the streets. The unique Smart Forfour was then produced from 2004-2006. From 2008 to the present, the Smart Fortwo has been available in a coupe model, and the Smart Fortwo ED(formerly known as EV) has been available in limited numbers through trial testing. Smart competes with other minicars across the globe, including the Mini Cooper, the Honda Fit, and the Toyota Prius and Yaris, but the Smart vehicles are still very unique from any other vehicles on the road.