By on February 14, 2011

Automotive News [sub] reports that Mercedes-Benz has agreed to take over Smart car distribution in the United States from Penske Automotive Group after about three years of operating as a Penske-run distribution channel. Beginning in July, Mercedes will take over all of Smart’s US-based operations because

1. It needs the small-car volume to meet new corporate average fuel economy standards that take effect in the United States in the 2016 model year.

2. Daimler AG integrated Smart into the Mercedes-Benz car unit September. The United States is the only market where Smart and Mercedes operate separately.

But the impact of this deal isn’t limited to ownership and operations, as AN [sub] reports that the four-door car being developed by Nissan for Smart USA has been canceled.

Says Mercedes-Benz USA CEO Ernst Lieb

If Smart continued as a free-standing network, they would need a second model to make it viable. By integrating it into Mercedes-Benz, there is no need.

Talk about a re-boot. Even the brand’s US boss, former Saturn honcho Jill Lajdziak is out, and Mercedes will appoint a new General Manager for the brand. More Mercedes dealers could be brought into the new Smart network, which will be run “similarly” to Mercedes’ Sprinter van brand. And with the cancellation of the Nissan rebadge, a move that reeked of desperation, it seems that Mercedes is back to handling Smart as a long-term investment that could bear fruit if gas prices spike. Though some will make the argument that the US needs the Smart brand like it needs more exposure to Bristol Palin, a new generation of lower-cost Smarts (jointly developed with Renault) could do better stateside when gas goes up again. And having lost money on Smart for decades, Daimler would have been crazy to let its brand equity be wiped out by become a Nissan rebadging outfit.

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7 Comments on “Penske, Nissan Rebadge Out As Mercedes Gets Smart (Back)...”

  • avatar

    Lower cost or not, the next iteration of the Smart Car simply needs to be a much better car. 

  • avatar

    Gotta find out what this means for my local smart retailer. The one for Austin (actually Round Rock) has a well deserved positive reputation, but it, and the neighboring Honda, Hyundai, and Toyota dealerships, are all owned by Penske, I think.

    Will I have to go to MB Austin or MB Georgetown? Lordy, lordy, let the answer be No.

  • avatar

    it didnt sound like Roger Penske is making mulla hand over fists. Or else Merc has to pay him dearly inorder to get the rights back.
    The benzene engines wasnt all it cracked up to be being frugal on fuel.
    The oel burner was, but not sure why it couldnt be sold in the land of Flower flags or Gold Mountain aka Gim san ( thats what people in Middle Kingdom refer to as)

    • 0 avatar
      bumpy ii

      The diesel wouldn’t pass US emissions without all the particulate traps, catalysts, and urea tanks that other USDM diesels need. It wasn’t worth the trouble to design all that for maybe 2,000 sales a year, and more importantly, there’s nowhere in the smart to put all that dumb shit.

  • avatar

    i found the distribution strategy for urban markets to be a bit odd. In Manhattan, small sales-only showrooms exist for BMW, Audi, and Mercedes.
    The same could be done with Smart, allowing for a presence in neighborhoods with lots of sidewalk traffic. How much retail space do you need for this car?

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