DaimlerChrysler has denied rumours that it may drop its Smart range despite the quirky city car brand failing to make a profit since the 1998 launch.

“The existence of Smart is not at stake,” says Ulrich Walker, who has headed Smart since July. Walker insists he has been given personal assurances by DaimlerChrysler CEO Juergen Schrempp and Mercedes Car Group boss Eckhard Cordes.

Smart cars are sold in the UK from dedicated areas in Mercedes-Benz showrooms. Year-to-date sales are up 24% to just under 9,000.

Mercedes-Benz third-quarter operating profits, which include losses at Smart, fell by 62% to £211m, the lowest since DC’s takeover of Chrysler six years ago. It follows an admission by Mercedes earlier this year that its cars were prone to breakdowns.

Last week, DC finance director Manfred Gentz warned that M-B full-year profits would be “significantly below” last year’s £2.15bn.