As part of the agreement, Mercedes designers would style future Smart vehicles and Geely would engineer them. With production based in China, the venture would aim to extend its portfolio of pure premium electric and connected vehicles.
Smart signaled its upscale ambitions at the IAA in Munich in September by unveiling the Concept #1. The SUV’s production version will be designed by Mercedes and built in China.
Mercedes first introduced Smart in Germany in 1998, and brought the quirky brand to the U.S. a decade later, with the initial two-seater model targeting urban buyers squeezed for parking spots. Sitting oddly next to the gleaming high-end S-Class, Smart never met its original global target of 200,000 annual deliveries.
Despite racking up losses, the tiny cars for some years helped Mercedes lower average fleet emissions in line with tightening regulations to even out burgeoning sales of heavy, gas-guzzling models like the GLE. That role has fast diminished since the German manufacturer started rolling out battery-powered models and CEO Officer Ola Kallenius shifted his focus to premium vehicles for better company valuation.
Mercedes-Benz’s parent Daimler, which counts Geely as one of its biggest shareholders, has lately been betting on China’s young, city-dwelling consumers to rejuvenate the brand in the world’s largest auto market. Still, the Smart joint venture will have to compete with a multitude of established and up-and-coming electric-vehicle makers in China.
Following the spinoff of Daimler’s truck unit in December, the automaker changed its name to Mercedes-Benz Group on Feb. 1, to signal its segue to a nimble standalone unit tackling the industry’s transformation.
Mercedes aims to have battery-powered models in all its segments this year to rival Tesla.