DaimlerChrysler plans to sell its 60-mile-per-gallon two-seater Smart Car in the U.S. next year.
The little Smart Car is just more than 8 feet long and less than 5 feet wide and is small enough to fit in half of a typical parking space.
The three-cylinder turbocharged Smart Car can achieve up to 60 mpg, according to DaimlerChrysler.
The automaker hopes to broaden the market for Smart Cars, which have lost money since DaimlerChrysler's Mercedes-Benz unit launched the program in 1998.
Mercedes took a first-quarter charge equivalent to $1.5 billion, including costs associated with scrapping the slow-selling four-seat model of the Smart Car.
The decision comes as growing numbers of U.S. consumers are worried about rising gasoline prices and smaller more fuel-efficient vehicles are attracting their attention.