DaimlerChrysler‘s designated chief executive Dieter Zetsche has expressed confidence in the future of loss-making minicar business Smart as he took over personal control of Mercedes Car Group, according to Reuters.

“I am extraordinarily optimistic that Mercedes Car Group is on a fast track higher. I am equally optimistic that we will make progress with Smart along the way,” he reportedly wrote in a memo to staff of the automaker’s premium car division.

“We have brands that are the envy of the entire industry, we have products that we can rightly be proud of, and we have in all areas staff whose competence and ability is second to none,” he added, according to Reuters.

The company reportedly released the letter on Friday, a day after Zetsche left Chrysler to run Mercedes for an unspecified period.

He replaces group CEO Juergen Schrempp at the turn of the year as well, the news agency noted.

Reuters said the financial community is watching eagerly to see what steps Zetsche has in mind for Mercedes, whose operating profit has plummeted amid model changeovers, a strong euro, spending to fix quality problems and hefty losses at Smart.

The market wants to know whether Zetsche, 52, will simply tinker with predecessor Eckhard Cordes’s plan to revive Mercedes profits and margins by cutting costs and boosting revenue, or whether he will take a more radical approach, the report added.

Reuters noted that some analysts have suggested pulling the plug on Smart, which has not made a profit since its debut in 1998 and is slated to break even only in 2007 despite sweeping job cuts and a narrowing of the quirky city car’s model line-up.

It lost nearly €4,000 on each car sold last year, the report added.