Chinese giant Geely and Mercedes-Benz have completed a 50:50 joint venture that will build Smart models in China, Reuters reports.
Said to have now received regulatory approval from Chinese authorities, the deal will lead to each company investing $780 million (£594m) in the company.
It will be based in the Chinese coastal city of Ningbo, where manufacturing will take place. Sales operations will jointly commence in China and Germany.
Under the deal, production of Smart cars will move to China, with new electric-only models arriving from 2022. Mercedes will lead the design and styling, while Geely - which owns Volvo and Lotus - will lead the engineering.
As part of the new product plan, of which precise details haven't yet been disclosed, Smart will expand into the B-segment. The deal is intended to further develop Smart as “a leader in premium and intelligent electrified vehicles”, according to a joint statement from Geely and Mercedes parent company Daimler. Smart last year became an electric-only brand.
Geely chairman Li Shufu said: “We fully respect the value of Smart.
"As equal partners, we're dedicated to promoting the Smart brand globally.”
Until the new models launch in 2022, current Smart cars will continue to be made at Daimler’s plants at Hambach in France and Novo Mesto in Slovenia.
Daimler will also invest around £427m in Hambach to prepare it for production of a compact vehicle in its EQ electric range.
The joint venture will be headed by a board of six directors, split evenly between Daimler and Geely.
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Lotus badged Smart
I wouldn't mind seeing a Lotus badged Smart, Lotus have a great reputation with regards to car handling and weight saving so a Lotus fettled Smart could do quite well and it will also help to reduce the CO2 emissions of the Lotus range.
Lotus into rallying
A Lotus B-car to compete with Fiesta et-al, would certainly throw the cat among the pidgeons in WRC! :-)
Something they should certainly consider - get some motorsport silverware in their trophy cabinet once again.
Stepping towards
This looks like a phased withdrawal by Daimler from Smart since a 50/50 shareholding rarely works. It's probably the right move for both parties as it now gives Geely a halfway decent set of European brands, albeit ones with little immediate cost-savings through platform sharing. The Chinese maker's credibility could benefit - IF buyers cared. But as per the often-seen pro/con rants here about JLR, Vauxhall or Bentley, these brands, even amongst enthusiasts, are still judged upon their country they were born in and not who owns them.
What about the Twingo?
wonder what Renault will do with the next generation Twingo? Geely seem to be on a march to take over struggling european brands, JLR, FCA next?