These days we’re witnessing tectonic shifts in the auto industry, with some automakers seeking to ensure their survival through mergers and others ditching their unprofitable ventures.
Daimler AG, for example, has just confirmed previous reports and announced that it sold 50 percent of the Smart brand to China’s Geely Holding. The two companies have formed a 50:50 joint venture “to own, operate and further develop smart, the pioneer of small urban vehicles, as a leader in premium-electrified vehicles.”
It’s an interesting development, considering that the Smart brand was born in 1994 also as a joint venture, at the time between Daimler and Swiss watchmaker Swatch.
Under the new joint venture agreement, Smart will develop a new generation of electric models that will be assembled at a new purpose-built EV factory in China. The financial terms of the joint venture have not been disclosed, but the new, electric Smart models are estimated to go on sale in 2022.
“We will jointly design and develop the next generation of Smart electric cars that combine high-quality production and known safety standards for sale both in China and globally,” said Daimler AG CEO Dieter Zetsche.
“As equal partners, we are dedicated to promoting the Smart brand globally; we will leverage our experience and global competencies in brand management, R&D, manufacturing, supply chain management, and other areas,” Geely Holding Chairman Li Shufu added.
As part of the agreement, the new Smart vehicles will be styled by the worldwide Mercedes-Benz Design network and engineered by Geely’s global centers. The vehicle development plan includes the expansion of Smart’s product portfolio into the fast-growing B-segment.
Until the new EVs launch in 2022, Daimler will continue to build the current generation of Smart vehicles at the Hambach plant in France (the EQ Fortwo) and Novo Mesto facility in Slovenia (the EQ Forfour).
As previously announced, the Hambach plant will build the EQA compact EV for Mercedes-Benz which is investing €500 ($562 million) in the facility. Daimler and Geely expect to finalize the joint venture by the end of 2019.