When Daimler introduced its tiny Smart two-seater in 1998, it was convinced that a high-end micro-car for crowded urban areas was an idea whose time had come. It had -- just not for Daimler. Three years later, BMW rolled out its own diminutive model, an update of Britain's vintage Mini, which soon surpassed the Smart and evolved into a family of roomier small vehicles. In addition to losing control of an urban car market it helped create, Smart has racked up more than E4 billion ($5.3 billion) in losses, according to estimates by Sanford C. Bernstein analyst Max Warburton. Now Daimler, the parent of Mercedes-Benz, is preparing to enlarge Smart's lineup. Daimler hopes the expanded Smart lineup will allow it to tap the growing market for city-savvy subcompacts, which IHS Automotive forecasts to rise 29% by 2015. BMW's Mini outsells Smart about three to one.