Ask The Best And Brightest: Is The Renault-Nissan-Daimler Deal Smarter Than The Smart Brand?

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?