Geely to buy Daimler’s smart?

China’s most voracious car-maker could buy half of the troubled smart mini-car brand off Daimler, the

Geely announced earlier this year that it was putting the brakes on acquisitions after swallowing Volvo, the London Electric Vehicle Company, flying car maker Terrafugia, Lotus and Proton, but the Financial Times story suggests it has changed its mind.

Citing three people in a position to know about the sale, the paper insisted Geely Automobile Holdings would snap up half of the loss-making smart outfit.

The odd part of this is that Geely founder and majority shareholder, Li Shufu, is also the biggest shareholder in Daimler itself, spending $US9 billion to buy almost 10 per cent of the German premium automotive group last year.

As we reported yesterday, Daimler has 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.

It’s unclear what use Geely would have for smart, except to somehow tie it in with the technology from its London Taxi Company, because that style of city-car has never taken off in Geely’s Chinese domestic market.

It’s also unclear what would happen to smart’s production facilities in France and Slovenia.

Lebanese-American businessman Nicolas Hayek, the founder of Swatch, conceived the brand as the Swatchmobile as early as 1982 and came to an agreement with Volkswagen to build the car in 1991.

Fearing (rightly) that Ferdinand Piech would kill the agreement in favour of Volkswagen’s own “three-litre car”, the Lupo that achieved 3.0L/100km fuel consumption, Hayek switched to Daimler, selling it 51 per cent of the brand in 1994.

However, arguments about everything from the name (it ended up being a semi-acronym for Swatch Mercedes Art) to the powertrain (Hayek wanted a hybrid) saw him sell the entire company to Daimler in 1998.