Geely Takes 50% Share in Smart From Daimler

Chinese automaker Geely has taken a 50% stake in Smart from Mercedes-Benz parent company Daimler, the two companies have confirmed.

Daimler and Geely plan to establish a 50:50 joint venture company to run the Smart city-car brand, which will exclusively offer electric-powered models starting in 2022.

Under the deal, production of Smart models will shift to a new purpose-built EV factory to be built and run by Geely in China. Mercedes-Benz will continue to be responsible for design and styling, with Geely leading engineering and production processes.

As part of the JV plan, full details of which are still to be finalized between Daimler and Geely, the Smart lineup will be expanded to include a B-segment model. It is expected to join successor models to today’s fortwo and forfour.

The Sino-German tie-up is intended to further develop the Smart brand as “a leader in premium electrified vehicles,” according to a joint statement from Geely and Daimler.

Geely already holds a 9.7% stake in Daimler. It also is the parent company to Lynk and Co., Proton, Lotus, Volvo Car Group, Polestar, Geely New Energy, Geely New Energy Commercial Vehicle Group, London Electric Vehicle, Yuan Cheng, Qianjiang Motorcycles, flying-car company Terrafugia and mobility solutions company Caocao.

Geely CEO Li Shufu says: “We fully respect the value of Smart. As equal partners, we are dedicated to promoting the Smart brand globally.”

Existing Smart models will continue to be produced at Daimler’s Hambach plant in France (fortwo) and Renault’s Novo Mesto factory in Slovenia (forfour).

Daimler says it will invest €500 million ($562 million) in its Hambach site to ready it for  production of a future compact model in its new range of EQ-branded EVs.

The Smart JV will be headed by a board of six directors, split evenly between Daimler and Geely. They include Hubertus Troska, Daimler board member responsible for China; Britta Seeger, Daimler board member responsible for marketing; and Markus Schäfer, member of the divisional board of management of Mercedes-Benz Cars for production.

Geely board representatives will include Geely Holding CEO Li Shufu; Geely Holding president and Geely Auto Group president and CEO An Conghui; and Geely Holding executive vice president and CFO, Daniel Donghui Li.

Financial terms of the Daimler-Geely deal have not yet been disclosed, and final details of the Smart JV are due to be completed by the end of 2019, according to the two companies.