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DaimlerChrysler recalls 1,650 Smart compact cars in Europe for steering fix

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FRANKFURT, Germany (AP) _ DaimlerChrysler AG said Friday it recalled 1,650 of its revamped Smart Fortwo microcars that were sold in Europe because of reports of possible steering problems.

The revamped model went on the market in April. The company said it ordered the recall after receiving reports that a locking ring was not affixed properly.

DaimlerChrysler spokesman Hubert Kogel said the all the cars had been recalled, repaired and were being returned to their owners.

No accidents or injuries were reported and the countries affected were not listed.

Smart GmbH, part of the Mercedes Car Group, has consistently lost money since it was formed, but DaimlerChrysler CEO Dieter Zetsche has said the company expects to break even later this year.

DaimlerChrysler spent nearly one billion euros (US$1.34 billion) on restructuring Smart, cut 300 of the 750 jobs at the unit's headquarters and ended production of its larger, four-seater Forfour model along with its two-seat Roadster in 2006.

Last year, Smart sold 102,700 cars worldwide, down from 124,300 in 2005.

The Fortwo is scheduled to hit the U.S. market in early 2008, with sales and service going through United Auto Group Inc. The first dealerships to carry the car are expected to be announced in the second half of 2007, with the car available to buyers during the first quarter of 2008. Some versions have, however, been brought to the United States on the grey market.

Given its size, less than three metres long and weighing about 770 kilograms, the company has stressed safety, highlighting a reinforced steel cage and four air bags.

United Auto will be responsible for picking potential U.S. dealers and developing and maintaining the dealership network. It will focus mainly on highly populated areas and have 30 to 50 dealerships.

Shares of DaimlerChrysler were down less than half a per cent to close at 67.70 euros ($90.68) in Frankfurt.

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DaimlerChrysler recalls 1,650 Smart compact cars in Europe for steering fix
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