The low-cost Swatch revolutionized the wristwatch industry in the 1980s. Can the supermini Swatchmobile city car do the same for automobiles this decade? Germany's Mercedes-Benz thinks it can. On Feb. 22, the carmaker signed a deal to develop such a vehicle with Nicolas G. Hayek, the ebullient chairman of Switzerland's SMH, maker of Swatch.
This will be Hayek's second try at working with a major carmaker. Loss-ridden Volkswagen pulled out of a similar project a year ago. Hayek's prototypes have featured gasoline, electric, and mixed engines.
The new venture is entering a crowded--and risky--field that includes all the major carmakers. Development of electric vehicles is being stimulated by expectations that California regulations going into effect in 1998 will boost the market. Mercedes is already working on a small car, the Vision, that will be available in electric as well as gasoline-powered versions. General Motors is about to start customer tests of a zippy two-seater electric runabout, the Impact. In the U.S., venture capitalist and Compaq Computer Chairman Benjamin M. Rosen and former GM Chairman Robert C. Stempel are interested in setting up companies to develop electric vehicles.