It can be argued that the Not-Sold-Here Syndrome is perhaps one of the biggest obstacles facing new product development in companies today. Stifling innovation, clipping brilliant new ideas in the bud and restraining progress are just some of the implications of such a mindset. If these prejudices had not been overcome, a number of great products would not have made it off the drawing board. As a case in point is the Smart Car.
Love it or hate, it almost every motorist today has seen an example of the Smart Car on the road. An iconic and extremely fuel efficient two seat micro-car that has come to embody one of the most drastic steps ever taken in automotive history – that of a watch manufacturer setting out to revolutionise the world of motoring.
It all started in the 1980s when Nicolas Hayek, the engineer and industrialist who founded the Swiss watch company, had the brilliant idea to develop a new car using the same type of manufacturing strategies and personalization features he had used for the then incredibly fashionable Swatch watches. However he did not have in mind just any type of car; he felt that the car industry had largely ignored a very popular sector – that of a small and stylish city car that would have the fuel economy of around 3 litres per 100 kilometres with practicality and safety to match.
Although Swatch Group initially began to develop the car themselves, Nicolas believed that established motor manufacturers would feel threatened by his Swatchmobile, as it was now called, and as a result began to look around for a potential partner. In 1991 an agreement was reached with Volkswagen to share the development of the new project. Not only would this help relieve the cost burden on Swatch but it would also enable the new product to leverage off the automotive manufacturing know-how of Volkswagen as well as eventually benefiting from an established selling and distribution network when the Swatchmobile was eventually brought to market. 
Unfortunately this arrangement did not last long. In 1993 a new CEO at Volkswagen brought down the axe on the joint venture in order to develop Volkswagen’s own subcompact car, the Lupo. This was because it was believed by the powers that be to be a better business proposition, featuring four seats and more cargo room. 
Thus left in the lurch, Swatch was forced to look around again for another partner. Rejected by BMW, Fiat, General Motors and Renault, it was eventually Mercedes Benz, (then Daimler-Chrysler) with whom Swatch teamed up. Not only did it prove to be the saving grace of the Swatch project and the partnership that eventually brought the car to market, this partnership was a very drastic move on the part of Mercedes, as the company was traditionally known for its C, E and S class luxury saloons and coupes. As one of the most premium brands on the market, venturing into the sub-city car class could be a rather risky move. One can only think how such an idea was opposed in the company’s boardroom by more traditional directors possibly claiming that the car was “not one to be sold here.”
Never the less, the two companies prevailed and the Smart car took the market by storm in late 1998. Still in production today, albeit in only slightly modified form, its popularity has skyrocketed in the face of rising fuel prices and city traffic jams. Involvement in the project even helped channel Mercedes thinking along the lines of developing the successful A-class – which to a degree is a big brother of the tiny Smart. In the end, it proved to be a very smart move by both Swatch and Mercedes.