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.
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.