The German concern Daimler AG announced the sale of 50% of the Smart division to the Chinese holding Geely. Smart will soon operate as a 50/50 joint venture between a German and a Chinese company. The amount of the transaction was not disclosed, it will be closed before the end of 2019.
The agreement assumes that in the near future Smart will completely reorient itself to the production of electric vehicles. Mercedes-Benz will be responsible for design and styling, while Geely will be responsible for the design and electrical units.
In addition to subcompact city cars, Smart will produce larger class B cars. The brand's positioning in the premium class will continue.
Now the two-seater Smart Fortwo is produced at the plant in Hambach (France), and the four-seater Forfour is produced at the Renault plant in Novo Mesto (Slovenia). From 2022, the production of brand cars will be completely transferred to China. The production site in Hambach remains in the possession of Daimler AG, he expects to re-equip it for the production of electric vehicles of the Mercedes-Benz EQ line (for this, the Germans will invest 500 million euros).
The board of directors of the Daimler-Geely joint venture will include six members, three from each company.
Daimler AG was forced to sell half of Smart - since its founding in 1994, this division has only generated losses. In 2018, 128,802 new Smarts were sold worldwide, Daimler AG does not disclose financial losses from the brand, but analysts estimate them at 700,000,000 euros.
Note that Daimler AG already has experience of interacting with Geely - in 2018, the owner of Geely, Li Shufu, became the largest shareholder of the concern. He bought a 9.69% stake in the concern for $ 9 billion, and the owner of the shares is not Geely, but another Shufu company - Tenaclou3 Prospect Investment Ltd.
Zhejiang Geely Holding Group is China's largest private automaker. In 2017, Geely's revenue reached $43 billion. The corporation owns 100% of Swedish Volvo Cars, 51% of British Lotus Motor Cars, 49.9% of Malaysian Proton Cars, 100% of London Taxi Company (cab manufacturer). In addition, Geely has an 8.2% stake in Volvo AB, which is one of Europe's leading manufacturers of trucks, buses, construction equipment, diesel engines, and marine and industrial engines. In 2017, Geely partnered with Volvo Cars to launch a new car brand, Lynk & Co.
The current Smart product line consists of the two-seat Fortwo, the four-seat Forfour, and the Fortwo Cabrio. Cars are equipped with petrol engines of 0.9 and 1.0 liters with a capacity of 59-89 hp. An electric version of the Fortwo is also produced, equipped with a 66 kW (90 hp) motor.
Daimler AG sold 50% of Smart to the Chinese
