Penske, Nissan Rebadge Out As Mercedes Gets Smart (Back)

Automotive News [sub] reports that Mercedes-Benz has agreed to take over Smart car distribution in the United States from 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.