The car was produced at the NedCar factory in the Netherlands in conjunction with Mitsubishi Motors. This is the same factory that produced Volvo 300 cars in 1970s and 1980s and the Volvo v40's in the 1990s. To save production costs, the Smart Forfour shares most of its components with the 2003 Mitsubishi Colt. This includes the chassis, suspension and a new generation of MIVEC petrol engines, ranging from the three cylinder 1.1 to the four cylinder 1.3 and 1.5L with power up to 80kW (109PS). The 1.5L cdi diesel engine, on the contrary, is a three-cylinder Mercedes-Benz engine derived from the four-cylinder of the Mercedes-Benz A-Class, and is available with either 68PS (67hp/50kW) or 95PS (94hp/70kW).
A Brabus-prepared sports version has been available since 2005. It is powered by a turbocharged Mitsubishi 4G15 engine, developing 130kW (177PS), 27PS (27hp/20kW) more than the Mitsubishi Colt CZT. It can reach a maximum speed of 221km/h (137 mph) and accelerate up to 100km/h (60 mph) in 6.9 seconds. The Forfour was to be sold in the United States along with the revived Smart Formore vehicle. However, due to slow sales, the Forfour has been phased out from production.