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Daimler AG To Decide smart Brand's Future By Year's End

Founded in 1994, smart came out with the fortwo in 1998. Following a few years of ok-ish sales, the commercial success of the brand took a turn for the worse. From a high point of 134,814 sales in Europe, the years following 2004 were not as lucrative for smart.
smart forease+ concept 1 photo
Photo: smart
Things in the United States are worse still, deteriorating from 24,622 cars in 2008 to 1,276 in 2018. For years now, analysts and experts in the industry questioned the lack of sales. The question is, how did Daimler AG allow smart to decline so much for such a long time?

A report from Handelsblatt paints a bleak, gloomy picture in this regard. Ola Kallenius will succeed Dieter Zetsche in May 2019 at the helm of Daimler AG, and from this position, the chief executive officer will have “no scrupules about killing the brand” according to a higher-up.

A microcar business that sells 128,802 vehicles per year doesn’t have a place in today’s automotive industry, let alone within Daimler AG. Even if smart partnered up with Renault to co-engineer this generation of models, the costs are too high to generate a profit.

smart prepares to go all-electric, abandoning internal combustion in the process to cut back on costs. But will that save the brand? We’re not keeping our hopes up, not with that range. In the case of the smart EQ fortwo, the range is estimated at 145 to 160 kilometers. That’s 58 miles of range as per the Environmental Protection Agency, not enough for a microcar with a base retail price of $23,900 excluding destination.

So far, smart hasn’t managed to hit the Daimler AG target of 200,000 sales per year. Investment house Evercore ISI estimate the annual losses at 500 to 700 million euros, the kind of money the mothership would otherwise utilize to research and develop electrified technologies for Mercedes-Benz.

smart head Katrin Adt would like to switch production from France to China, especially if the brand could produce the next generation of cars with Geely. She’s been the chief exec of smart for almost a year now, but thus far, Adt couldn’t and didn’t make a difference for the better.
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About the author: Mircea Panait
Mircea Panait profile photo

After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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