Daimler mulls future for SMART – Close it down or sell to Geely

Daimler, Mercedes’ parent company, looks to be mulling the future for its Smart Car brand. Close it or sell a 50% stake to Geely.

Daimler, Mercedes’ parent company, has spent an awfully long time trying to make its Smart Car brand a success, but despite a chunk of Smart anoraks obsessed by the brand it looks like it’s lost money – up to £600 million a year – ever since Daimler joined up with Swatch to create the brand more than 20 year ago, taking full control in 2005.

Now it would seem that Daimler’s incoming boss, Ola Kallenius, is likely to look at the Smart problem with fresh eyes, untainted by any history with the brand. And it looks like there are two options.

The German press reported earlier this week that Daimler is likely to close Smart altogether and draw a line under its losses, although we would have thought there must be value in the brand to make a sale rather than just close it down and bin it. 

But now the Financial Times is citing a much more likely path as the future for Smart, with China’s Geely – owners of Volvo, Lotus and more – taking a 50 per cent stake in Smart.

Geely already owns almost 10 per cent of Daimler through boss Li Shufu, and the claim that Geely will take a big stake is entirely credible, although what German regulators will make of such a big chunk of a Daimler company going to China could decide the fate of Smart.

According to the FT, Daimler and Geely will announce the deal before the Shanghai Motor Show in April.