Smart’s future in the balance

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Daimler wants to decide this year about the future of its small car brand Smart. Under the incoming new CEO Ola Källenius, the little car may fall victim to pressure to make savings at Daimler. Smart boss Katrin Adt is already looking for a partner in China to lower costs.

At least this is the difficult future the Handelsblatt has made out for Daimler’s smallest car offering. The newspaper quoted an insider saying on the new boss that “Ola has no history with the Smart”. The source went on to say that Källenius would probably have no scruples about burying the little car if deemed necessary, especially as his background lies with AMG.

The story looked a little different under Dieter Zetsche, who had last appointed sales wizz Katrin Adt as the new Smart boss last autumn. Her job is to put the company back in the black with Smart after two decades of constant losses. But after six months in office, she still has no concrete strategy at hand, according to Handelsblatt. The fact that Daimler’s overall profit fell by 30 per cent last year does not make a positive decision for the future of Smart any easier. “We have other issues,” a high-ranking Daimler manager was quoted as saying. And to make matters worse, Daimler CEO Dieter Zetsche, the most important advocate for the brand, is retiring. Only in October, industry insider, Georg Kacher had pointed out that the future of the Daimler brand stands on shaky legs.

In between, however, Smart had been forward-looking when announcing complete electrification in Europe and the US for example (we https://www.electrive.com/2018/04/09/smart-is-going-it-all-electric-in-europe-too/). The last Smart with a combustion engine rolls off the production line in the middle of the year, and the last orders for ICEs in Europe will be accepted until 31 March. However, even the cheapest electric Smart with around 22,000 euros is not a bargain, at least not for a car of this size.

To reduce costs, Katrin Adt is looking for a partner and also producing in China reportedly. Industry circles reckon that Daimler would negotiate with its long-standing joint venture partner BAIC. There are also talks with Geely. “The future of smart lies in the Far East, quite clearly,” confirms one manager. In definitive terms, Daimler will not produce the next generation of the two-seater together with Renault in Hambach, France, any longer but in China. Smart previously shared a large part of the technology with Renault, but the cooperation is on hold and apparently on the verge of collapse because none of the parties wants to continue working on the small (electric) vehicles together.

handelsblatt.com (in German)

Additional reporting by Nora Manthey.

1 Comment

about „Smart’s future in the balance“

Robert Erskine

26.03.2019 um 09:44

Design, Design, Design! What's gone wrong? The current evolution of the original Smart ForTwo is the issue. It's a clone a Renault one at that and it shows.Awkward difficult forms, reminiscent of a brick, the current Smart Car has little if any visual charm.Daimler cite excessive production costs with the current Smart Car to convert it into an EV, having cloned it onto a Renault Twingo. Yet the original Smart was a model of production efficiency and quality, manufactured in its state of the art factory, at Hambach, on the French German border. Most major components and assemblies were manufactured under the same roof.All the vitality, energy, and superb design of the first two models the 450 and 451 have been lost. It's any wonder sales have dropped. The original Smart Car designers and marketing teams have I understand disappeared and so has the innovation. Why do car manufacturers do this? In fine art, painting, sculpture and design, getting close to an idea is through refinements and evolution not a sudden sticking an idea onto something else. It's purity of design that wins and it was getting there with the 451 Smart ForTwo. Like the original Mini had its unique qualities, BMW have ruined it by pumping it up with a bicycle pump and inflating the size so the current Mini is no longer a 'Mini' it's a 'BIGNI’.The Smart Car has the world's biggest owners club why? because the original captured the fun and quirky qualities as children we are naturally drawn too. That has all but gone with dreary uncreatives (who've never studied art and design) the face of the brand, it's any wonder Smart has become an embodiment of those running Smart now. What a great big shame!'Electrifying' the Smart is exactly what it needs and not just adding a battery. The pity is the Smart concept and template is perfect for an all electric city car, it’s just that the fundamental irresistible lure of the original has gone and other competitors using this formula are racing up to gain position.Robert Erskine Automotive Broadcaster BBC Radio Suffolk UK Senior European Correspondent Autolab Broadcast USA. Member of IMPA (International Motor Press Association). IAM RoadSmart UK (Observer Institute of Advanced Motorists).