Geely confirms it has bought half of smart

Unloved French-German city car builder smart is suddenly feeling loved again, with China’s Geely buying half of the company overnight.

As reported here yesterday, Geely had been tipped to take a big bite out of smart, and that’s exactly what it has done by creating a 50:50 joint-venture with smart’s parent, Daimler.

Interestingly, though, Geely’s founder, Li Shufu, owns 9.7 per cent of Daimler after paying US$9 billion for his stake last year.

While no official statement on the cost of Geely’s 50 per cent share of smart has been released, it effectively means Geely ought half of a company its boss already had a 10 per cent share of.

Geely has already announced that smart will move to become a pure BEV company and that production of the smart fortwo will continue in Hambach (only just in France) and the forfour at Slovenia’s Nova Mesto until the current generation of cars cease production around 2022.

The new models, which will include an expanded range that creeps up into the B-segment, will be engineered by Geely and designed by Mercedes-Benz.

The production of the next generation of BEV smarts will be based on a new plant that is about to commence production in China and will be ready for deliveries in 2022.

The current smart plants aren’t a part of the deal, though, with Hambach switching to a compact EQ BEV wearing Mercedes-Benz branding, while Daimler hasn’t confirmed the future of the Slovenian plant.

The Chinese company so far shows no signs of indigestion after having swallowed Volvo, the London Electric Vehicle Company, flying carmaker Terrafugia, Lotus and Proton in the last few years.

It has worked with Daimler before and the two companies are already partners in a ride-hailing start-up in China.

“We fully respect the value of smart. This brand has a unique appeal and strong commercial value,” Geely founder Li Shufu said in a statement.

“Geely Holding and Daimler look forward to this challenging and exciting new project, through which we will further push the introduction of premium electric products to give a better mobility experience to our customers.

“As equal partners, we are dedicated to promoting the smart brand globally; we will leverage our experience and global competencies in brand management, R&D, manufacturing, supply chain management and other areas.

“The synergies from this cooperation will lead to mutual benefits, at the same time we will further develop technologies for smart including connectivity, to continue to lead in the industry as it undergoes a wider transformation,” he said.

For its part, Daimler has been keen to get at least some of smart’s loss-making habits off its books, especially with chairman Dr Dieter Zetsche about to retire and his successor, Ola Kallenius, never involved in its early history.

“For more than 2.2 million customers, smart represents a pioneer in urban mobility,” Dr Zetsche said.

“Based on this success story, we look forward to further enhancing the brand with Geely Holding, a strong partner in the electric vehicle segment.

“We will jointly design and develop the next generation of smart electric cars that combine high-quality production and known safety standards for sale both in China and globally.”

As reported yesterday, Daimler had set a deadline of the end of this year to decide what to do with its troubled city car brand, which has lost money every year since 1998.

smart was founded by Swatch watch founder Nicolas Hayek (indeed, “smart” is shorthand for Swatch Mercedes Art). He sold 51 per cent of the company to Daimler in 1994 before parting with his remaining shares in 1998, claiming Daimler had moved too far from his original concept.

Mercedes-Benz withdrew the smart brand from the Australian market in 2015 on the back of slow sales.