DaimlerChrysler has received a ton of flak for its Smart car brand from both its shareholders and motoring journalists ever since the label was launched back in 2002, and with good reason. It has just been revealed that the minicar offshoot has lost close to €3.9 billion ($5.21 billion) between 2003 and 2006, according to figures published by German newspaper Handelsblatt.

Without the losses of the Smart brand, Mercedes would have posted a record operating profit of more than €4 billion for the past year but instead achieved a still significant €2.4 billion result. According to statements from DCX, restructuring of Smart and the development of its second-generation model cost more than €1.2 billion in 2005 but experts are predicting that the losses will continue for some years. However, a spokesman for DCX stated that Smart would turn a profit for the first time this year.

Things are definitely looking better. An upturn in Smart’s performance helped DCX sales rise by 2.9% last month with sales increasing by 14.7% for the Smart brand in May alone. Despite this, sales were still down by a whopping 35.1% for the first five months of the year but the new model is showing some definite progress.