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Why Daimler Dumped Penske Over Smart

But after years of dithering, can the Germans do better at selling microcars to Americans?

by on Feb.18, 2011

Roger Penske and his team - including Smart boss Jill Lajdziak - appear to have been blindsided by Daimler's announcement about the brand's future.

After dithering for years over the future of Smart, Daimler AG is about to take a make-it-or-break it gamble on the long-struggling brand.

In a surprise move, the German maker – which also builds the high-line Mercedes-Benz brand, announced it would pull Smart’s U.S. distribution operations away from the Detroit-based Penske Auto Group and operate the American franchise on its own.  Penske had been given the distributorship, in 2008, after years of delay by Daimler, which wasn’t sure how to sell small cars in a market that normally equates bigger with better.

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Roger Penske, chairman of the eponymous Penske Auto Group and one of the most respected figures in the U.S auto industry, says the German automaker’s decision to cancel its distribution agreement with PAG was shaped by a desire to integrate Smart more closely into the Mercedes-Benz marketing organization.

“Going forward, Smart is seen as an integral part of the Mercedes-Benz network,” Penske said, adding Mercedes-Benz also needs the efficiency credits generated by Smart to meet future fuel-economy standards in both Europe and North America.


Mercedes-Benz Pulls Smart Franchise from Penske

Move likely to scuttle plan for a Nissan-made Smart four-seater.

by on Feb.15, 2011

Roger Penske's auto group will lose the Smart USA franchise by mid-2011 to Mercedes-Benz.

Days after officials from the Penske Automotive Group expressed their commitment to stand by the struggling Smart brand, they’ve been given their walking paper by Daimler AG, which produces the minicars.

Operation of the franchise, which has seen its sales in the U.S. collapse since a briefly successful 2008 launch, will be taken over by Mercedes-Benz USA by the middle of the year.  MBUSA said it has already begun negotiations to end Penske Automotive Group’s management, sales and marketing activities of the Smart car in the United States.

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The announcement also appears to spell the end of Penske’s efforts to rebuild the Smart brand in the U.S. by turning to Nissan, which was expected to begin providing a new four-seat model that was to be introduced wearing a Smart badge, later this year.