The first generation of the ultra-compact city car debuted in 1998 originally named smart City-Coupé before being officially rebranded as the Fortwo in 2004 during a corporate portfolio realignment. Built on an innovative rear-engine, rear-wheel-drive architecture, the vehicle featured a high-strength steel Tridion safety cell paired with interchangeable, dent-resistant thermoplastic exterior body panels. The vehicle was offered as a two-door coupe (three-door hatchback) and a two-door cabriolet with an electrically operated canvas soft top. Powertrain choices included turbocharged 0.6-liter (later enlarged to 0.7-liter) three-cylinder petrol engines developing between 45 and 61 horsepower, along with an ultra-efficient 0.8-liter cdi three-cylinder turbodiesel producing 41 hp. Power was sent to the rear wheels via a six-speed automated manual transmission. A comprehensive facelift in 2002 introduced distinctive peanut-shaped headlights, recalibrated suspension geometry, enlarged fuel capacity, and enhanced electronic stability programming (ESP) as standard. The model was widely exported across European and Asian markets.