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By Michael Giusti - Bankrate.com

At the Detroit Auto Show in January 2005, American car buyers caught their first glimpse of what happens when a German luxury car company pairs up with a playful Swiss watch maker to design a new brand of car.

It may sound like nothing more than a novelty item, but the manufacturer says it's wildly successful in Europe. And it could start showing up on American roadways soon.

Marking its first formal debut in the United States, a company that calls itself "smart USA" officially unveiled its entire line of European micro-cars at the Motown extravaganza.

A division of Daimler-Chrysler, "smart" is the result of a joint effort between Swatch and Mercedes. (Hence the name: S for Swatch, M for Mercedes and ART for art.) Though the name is technically an acronym, the company uses all lowercase letters because, "We are just different, I guess," says Julia Knittel, spokeswoman for smart USA.

Weighing in at just over 1,500 pounds, the fortwo -- as in, the car is for two people -- is about 8 feet long and less than 5 feet wide. That means the micro-car is merely a few inches longer than a Hummer is wide.

Originally launched in Europe in 1998, the smart fortwo is a tiny vehicle designed to zip through tight urban streets.

"Five years later, the brand has accomplished a lot. It has become the 'it' vehicle in Paris and London," says Knittel. "It is becoming more than just a functional mode of transportation."

Smart hopes the micro-car will become as much an accessory for the fashionable urbanite as it is a vehicle.

The fortwo resembles a colorful coconut on wheels and comes equipped with "swappable" side panels, meaning you can drive a different color car every day.

Priced below $20,000, smart is targeting buyers who want to have fun with the car they drive, Knittel says.

"We try to not target age groups or particular demographics, so much as we go for 'psychographics,'" she says. "We want to sell to people who want more than just mobility from their vehicle; they want a car that fits into their lifestyle and are open to creative concepts."

Many critics doubt the SUV-crazed American public would be quick to embrace such a tiny vehicle, but given the right marketing, smart may have a shot in the United States, says Dan Kahn, road test editor for Edmunds.com, a national Web-based automotive magazine.

"They should be able to sell decent numbers if they can convince the public this is a real car and not a golf cart," Kahn says. "We will have to wait and see. To date, tiny subcompacts haven't sold very well. Then again, look at the Scion xA. That's pretty small and there seems to be a decent market for that."

Kahn says urban city dwellers and young professionals who want a hip and interesting alternative may be likely to embrace the smart brand.

The fortwo offers more than good looks, Knittel says. The fortwo gets about 50 miles per gallon of gasoline, she says, and their diesel model goes farther than 60 miles on each gallon.

Since the fortwo's introduction, smart has added the forfour, a four-door micro-sedan, and the smart roadster to its lineup.

Debuting the slate of cars at the Detroit show gave smart a chance to display its wares and to get feedback from the floor, Knittel says.

"We want to see how the public reacts and find out how much of a demand exists for our products," she says.

Industry observers had expected smart to use the Detroit Auto Show as a forum to unveil their next line -- a micro-SUV (or smart utility vehicle) called the formore. Knittel says they changed plans in December when smart decided the show would be too early for such a rollout.

Even though smart showcased its existing line in Detroit and has been selling cars in Europe and Canada for years now, it appears to be in little hurry to sell the micro vehicles in the United States any time soon.

Without a dealer network or any real marketing efforts here, Knittel says smart doesn't foresee selling its first car in the United States until late 2006, and added that is not even a firm launch date.

Rest assured, though, American buyers don't have to wait for smart to break ground in the United States before they can get their hands on a fortwo.

ZAP, a car dealer based in California that specializes in electric vehicles and other low-emission transportation options, has taken it upon itself to hurry the fortwo onto the U.S. market. ZAP, short for Zero Air Pollution, began working with an importer two years ago to retrofit the European model to adhere to U.S. emissions and collision standards.

The Environmental Protection Agency gave ZAP its final nod in December. EPA approval cleared the road for ZAP to begin selling retrofitted fortwos throughout the nation. It also paved the way for ZAP to apply for the more strict California emissions approval.

"We have heard that it typically takes three or four months from the time you get federal approval to the time you get California approval, but we have no control over the timeline,"says Steven Kim, director of investor relations for ZAP.

While it waits for approval from California, ZAP is gearing up to begin delivering fortwos to non-California residents on its 8,000-customer waiting list.

ZAP is not affiliated with smart and gets its cars from Smart-Auto LLC, an independent California-based importer that buys the cars directly from the dealer. Smart-Auto is the only company approved by the EPA to retrofit the cars so far, Kim says, and ZAP has signed an exclusive distribution deal with them.

"Right now, we are the only legal way to get a fortwo in the U.S.," Kim says.

Between the time ZAP begins selling fortwos and when smart formally enters the market, Kim says ZAP dealerships will service the cars itself.

As of December, ZAP had signed deals with about 30 dealers around the nation and Kim says they are in talks with a national retailer to possibly expand that number to 200. He would not identify the retailer or say in which markets their first dealerships will open.

Kim says it should take ZAP about three months to deliver a car from the time a customer puts down a deposit. He says the first fortwos should fetch about $22,000 each.

Despite its tiny size, Kim says the fortwos fared surprisingly well in the crash tests. Each smart is built around a "safety cell," which is a reinforced passenger compartment the shape of a walnut.

To prove the car's mettle, smart released a crash-test video pitting the fortwo against a Mercedes E Class luxury sedan.

"It achieved very high results in our crash tests," Knittel says. "After that crash, the safety cell was still intact."

While any smaller car is at a disadvantage in a wreck with a larger car, the smarts have fared well in real-world scenarios in Europe.

"They're safe cars," Kahn says. "Remember, they were designed to cruise on the Autobahn. They were tested to a very high standard."

Knittel says she is confident the smart is ready to make its entrance in the American market within the next few years.

"People are longing for a brand that stands out aesthetically. It is a car that makes sense and has a soul," she says. "We think America is ready."

Michael Giusti is a freelance writer based in New Orleans.