By on April 7, 2010

As analyst comments on the freshly-announced Renault-Nissan-Daimler deal come in [via Automotive News [sub]], a consensus seems to be building around the notion that the tie-up offers few real advantages to the three firms outside the real of small-car development. The financial impact and opportunities for luxury-segment component sharing are constrained by the deal’s structure, meaning the stock-swap and attendant hoopla are little more than window-dressing for the real project: developing compact and subcompact cars for tomorrow’s C02 standards. As Bertel noted, rumors of a Daimler-Renault tie-up have always centered around the Smart brand, and today Daimler’s Dieter Zetsche told Automotive News [sub] that

We could not have found a feasible basis alone for the next-generation Smart family… Of course, we could do a next-generation Smart alone, but we would lose a lot of money

And with a new, jointly-developed, four-seat Smart now planned for the US as well as Europe, Daimler plans to capitalize on years of money-losing brand-building at Smart. But what isn’t addressed by the deal is the fact that Daimler is also planning a range of Mercedes-branded, front-drive replacements for its Europe-only A- and B-class models… and that they are rumored to be heading stateside as well. With BMW headed into the compact front-drive market, we’ve wondered whether they didn’t simply leave such activities to their MINI brand. Mercedes, it would seem, now finds itself with a similar dilemma. As premium brands are forced by environmental legislation to downsize their offerings, what are the relative benefits of offering compact cars as both, say, Smart and Mercedes brands? Could we soon be hearing that Daimler will keep the new compact Mercedes models in Europe, and leave the American-market downsizing to its Smart brand? After all, brand dilution at Daimler seems to be a recurring theme in analyst comments on today’s tie-up. But is Smart a strong enough brand in the US to carry the brunt of Daimler’s dreams of CAFE compliance? If you were behind Dr Z’s mustache, would you wield Mercedes, Smart, or both, as you move towards the compact future?

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14 Comments on “Ask The Best And Brightest: Is The Renault-Nissan-Daimler Deal Smarter Than The Smart Brand?...”

  • avatar

    To your final question, “If you were behind Dr Z’s mustache, would you wield Mercedes, Smart, or both, as you move towards the compact future?”

    We at TTAC can’t have it both ways: ragging on carmakers for brand dilution, then ragging on them again because they didn’t cash in their brand to make a quick score. Minicars arre absolutely not consistent with the Mercedes brand in America, which is why they never did them.

  • avatar

    I think Civic is bigger than the 190, and quite a few were sold in America. Smart is too retarded to make big inroads into compacts: worse fuel burn than the aforementioned big Civic, and useless (although I saw it once parked in Costco’s lot). But a small Merc, that would be interesting. BTW, I’m ok with FWD for that.

  • avatar

    As much as I like the Smart in theory (or with a ‘Busa powerplant in reality) I find it really tough to argue that it is competitive in the market. Any market – and even more so in the US without the diesel available.

    Sure the S2000-shrinkydink Smart convert was neat- underpowered and never available available in the US, but neat.

    If one is selling to the economy-oriented buyer, the lots are thick with roomier, more conventional/practical cars at the same, or lower, price point. That achieve rather similar mileage.

    Though I have seen more and more Smarts on the road as of late, I still am not sure how successfully the brand has been established. Or at least, that what was established was was MB was looking for.

  • avatar

    Mercedes. Small, expensive, and better than anything else out there. If they can do that, it fits the brand.

    If they set their sights lower, make it a Smart.

  • avatar

    Introduce a 50-state diesel option for the C, E, GLK, R, M, and GL vehicles. Offer something similar to the S400’s hybrid system in everything but the G and the sports car/roadster classes.

    Use Smart as the “compact car” brand in North America. There is nothing wrong with the Smart brand that couldn’t be fixed by a better transmission and the nixing of the premium fuel requirement. If need be, do a cheap Mercury-style grill swap on the A and B classes to make them Smarts for North America.

  • avatar

    Don’t dilute the brand. Smarts may not be so great, but they haven’t been a disaster. If they make better cars I think people will give them a look. Hyundai overcame a less than stellar start in North America by continuously improving their vehicles and adding value via their warranty. Like Jaron says, if they call it a Mercedes, it better be a very, very, nice little car, no room for error.

    I actually think BMW is making a good move. No reason they can’t pull off a small FWD car with the BMW look and feel. Yeah, I know real BMWs don’t have FWD, but most buyers won’t care. Mini is an entirely different animal, they could use the same platform under both brands and appeal to entirely different buyers, assuming they go beyond 80s-GM-style badge engineering.

  • avatar

    The concept of the “smart” isn’t wrong. It’s just that MB doesn’t have the ability to pull it off. Maybe labor is overpriced in Germany. Maybe they are too arrogant.

    The “smart” should have been a Leaf Junior, all electric, shorter range, and about $15k.

    • 0 avatar
      George B

      An electric Smart would be a great city car that’s easy to parallel park except for one problem…where would the owner recharge the car? If you park on the street, you’re dependent on someone else to provide electrical power, probably at a relatively high price. If you have access to a garage, you have less need for the Smart short wheelbase packaging. Is the Smart brand flexible enough to include normal form factor cars for suburban garages?

  • avatar

    Just a minor clarification: the B-class isn’t Europe-only. We’ve had then in Canada for several years.

  • avatar
    Kyle Schellenberg

    I would definitely say… what where the choices again?

    Just buy up the namesake for Saturn from GM and start producing quirky little cars again. That would have a better chance of acceptability in mainstream ‘Merica

  • avatar

    If only Daimler had acces to a brand that is known as frugal and affordable. Something that could be stretched from bare bones econo-box through respectable pseudo-lux mid-size cruiser. You know, like Plymouth. Or Mitsubishi. Or Dodge. Or Chrysler.

    Does Daimler do anything other then sell dumb Americans expensive European taxis and death traps on wheels Smarts (according to our resident ex-Mopar engineer who says that in the Daimler-Chrysler days they cheated to get the Smart to meet US crash standards).

  • avatar
    chitbox dodge

    I don’t know, I smell a rat. If daimler was dead set on getting into the small car market, why not bring over the A and B series cars? Why go through the trouble of “merging” with a rival?

    You add this to the previously confirmed bad behavior of MB with bribes and the internal gutting of chrysler, to me it makes one wonder what is really going on.

    I think Mr. Ghosn is playing some dangerous games these days.

  • avatar

    Was that Carlos Ghosn posing in the little car?

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