Daimler and Geely form a joint venture to develop Smart
1 April 2019
Daimler has agreed a deal with its majority shareholder Geely that will see the Chinese company take a 50% stake of its Smart brand.
The German company recently announced that it was considering the future of its mini car brand following years of unprofitability. Smart is planning to become an electric-only brand in the near future. Under the joint venture agreement, the new generation models will be assembled at a new purpose-built electric car factory in China with global sales due to begin in 2022.
Dieter Zetsche, Daimler’s chairman, commented: ‘We look forward to further enhancing the Smart brand with Geely Holding, a strong partner in the electric vehicle segment. 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. In the future, we are looking forward to working with all partners to sustain our success in China and worldwide.’
Li Shufu, Geely Holding Chairman, added: ‘We fully respect the value of Smart. This brand has a unique appeal and strong commercial value. Geely Holding and Daimler look forward to this challenging and exciting new project, through which we will further push the introduction of premium electric products to give a better mobility experience to our customers.’
The joint venture partners have agreed that the new generation of Smart vehicles will be styled by the worldwide Mercedes-Benz Design network with engineering from Geely global engineering centres.
The plan will also see Smart expand its model line-up and enter the B (small car) segment with a new range. Production in China will allow the marque to give itself a foothold in what is the world’s largest car market and adds another electric option to Geely’s portfolio alongside Volvo and the London Electric Vehicle Company (LEVC).
The board of directors of the new Smart joint venture will be made up of six executives with equal representation from both parties.
The joint venture will allow the expensive development of electric vehicle (EV) technology to be shared with other carmakers and Geely could bring experience from its Volvo and LEVC brands to speed up the project. A 2022 date would bring EVs to market a year before Volkswagen’s mass electric adoption and could give the small-car manufacturer a chance to seize market share in China.
In preparation for Smart’s EV push, Daimler cancelled contracts with a number of dealers in 2017 as it envisaged a whole new sales concept for the technology.