Smart GmbH and United Auto Group Inc. said Thursday they will bring the two-seat smart fortwo to the U.S. in early 2008.

Boeblingen-based Smart, part of DaimlerChrysler AG's Mercedes Car Group, said its President Ulrich Walker had signed a general distributor agreement with United Auto Chairman Roger Penske on Wednesday.

"This is absolutely the right car in the right place at the right time. It embodies the unique combination of a lifestyle and design-oriented vehicle that is ecologically appealing," Walker said. "Smart is uniquely designed, offers the lowest cost of ownership and is very fun to drive."

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The agreement outlines all aspects of the model's sale in the United States, including sales, service and the initial launch.

The first dealerships to carry the car are expected to be announced in the second half of 2007, with the car available to buyers during the first quarter of 2008.

United Auto will be responsible for picking potential dealers and developing and maintaining the vehicle dealership network throughout the U.S. It will focus mainly on highly populated areas and have 30 to 50 dealerships.

Smart launched the fortwo in Canada in 2004, and last year it sold about 4,000 models there, or twice what it had initially forecast.

Last year, Smart sold 143,000 cars worldwide, a small increase from the 139,000 it sold in 2004. It produced 124,300 cars in the same period, down from 152,100 the previous year.

Earlier this year, DaimlerChrysler Chief Executive Dieter Zetsche said that high gas prices, congested roadways and the constant search for parking made the fortwo an ideal car for U.S. buyers, particularly in urban areas.

The fortwo's three-cylinder, 700cc engine has significantly lower emissions than other cars and gets an average of 40 miles per gallon in combined city-highway driving and will sell for less than $15,000.

Other automakers also have begun selling small, sporty small cars, including Toyota Motor Corp., which has the Yaris, and Honda Motor Co., which sells the Fit.

DaimlerChrysler has spent nearly 1 billion euros on restructuring Smart, cut 300 of the 750 jobs at the unit's headquarters and ended production of its larger, four-seater forfour model.

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