Why Daimler’s Smart Cars Will Soon Come From China

#News(General) [ via IoTForIndiaGroup ]

Mercedes-Benz parent Daimler AG (NASDAQOTH: DDAIF) and Chinese automaker Geely Automobile Holdings (NASDAQOTH: GELYF) have formed a new joint venture that will turn Daimler’s money-losing small-car brand, Smart, into an all-electric carmaker based in China.

It’s an interesting move for both companies, one that deepens the already substantial ties between the world’s oldest automaker and a new one with global ambitions. Here’s what we know.
What’s the deal?
Daimler and Geely say they have signed a “strategic cooperation” agreement, under which they will create a 50-50 joint venture that will build all future Smart models in a brand-new “purpose-built” factory in China, with global sales expected to begin in 2022.

All of those future Smart models will be electric, but they won’t all be tiny city cars. Daimler and Geely say they will expand the brand into the so-called “B segment,” subcompact cars one size up from current Smart models. (The Ford Fiesta and Honda Fit are both considered subcompact or B-segment cars.)

Those future Smart models will be engineered by Geely with help from Daimler, and styled by Daimler’s Mercedes-Benz Cars unit.

What is Smart?
Smart is Daimler’s brand of small, fuel-efficient city cars. Launched in 1998, the original idea was that Smart’s little cars would help Daimler meet average fuel-economy standards without having to build smaller Mercedes-Benz models that might devalue the luxury brand.

Back in 2016, Daimler said that it planned to develop three battery-electric vehicles for the Smart brand, and that the brand would be all-electric by about 2020. But the open question has been how much money Daimler would be willing to spend to make that happen, as Smart has never been profitable. The company doesn’t report results for Smart separately, but some analysts estimate that it may lose as much as 700 million euros ($785 million) every year.

A black and red Smart EQ ForFour, a small four-seat electric car.

Read More..