This is a partial transcript from "Your World with Neil Cavuto," January 10, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Well, it's said to be the next big thing, but it's actually quite small. I'm talking about DaimlerChrysler's (DCX) new Smart Car, which made its debut at the Detroit Auto Show (search) on Sunday.

But is it too small for American drivers who are, shall we say, "calorically challenged?" Let us ask David Schembri. He's the vice president of marketing for Mercedes-Benz' Smart USA. He joins us from the auto show.

Good to have you, sir.


CAVUTO: Does the Smart Car require you to be thin?

SCHEMBRI: No, I don't think so. We had a guy this morning, six-foot, nine-inches — he said, "I'll never fit into that car." He fit into that car quite comfortably and he had a big smile on his face when he got in it.

CAVUTO: Well, did he need Crisco and someone to wedge him in there, or what?

SCHEMBRI: No, not at all. In fact, we could have fit two people his size in that car quite comfortably.

CAVUTO: What is going on with this? I know BMW has been kind of doing this and other carmakers with these smaller cars — some of them almost look like toys too me. But that does seem to be the rage. What's going on?

SCHEMBRI: Well, I think America's moving to a point where maybe you want to stand out a little more, rather than blend in. I think you would want to conserve rather than consume, and these are cars that make sense, and they have a soul.

CAVUTO: All right. Now, obviously, BMWs have no problems selling the Cooper and some of these other mini cars. Is this going to cannibalize off your larger models, though? Are you afraid that by introducing these new models, you're either opening up new markets or cannibalizing the ones you have?

SCHEMBRI: No, not at all, Neil. We think there's a lot of room for cars like this, cars that answer some serious transportation problems in the United States: crowded urban areas, parking difficulties. And really, just fun to drive.

CAVUTO: Well, speaking of fun to drive, I notice you scored some amazing inroads with your four-matic all wheel drive cars, I guess, along your model line. It's almost the entire model line, almost the entire S-class, your premium line, up to I think, but not including the S-600.

How big a draw have these been?

SCHEMBRI: They have been a fantastic draw. You know, in most of the weather states throughout the United States, the installation rate on all- wheel drive is nearly 100 percent. They're fantastic cars, and they drive just like the two-wheel versions.

CAVUTO: All right. Dave Schembri, thank you very much. Appreciate it, sir.

SCHEMBRI: Thank you, Neil.

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