Mercedes-Benz's tiny car brand bets on China after failing in US

CNBC Automobile 1 month ago

Mercedes-Benz's struggling city car brand is betting a move to China will keep it alive.

The Smart car brand co-founded by the German automaker and Swiss watch company Swatch in the mid-1990s has struggled in recent years, beset by high labor costs, the notoriously low margins on small economy cars and markets that have increasingly favored sport utility vehicles and crossovers over compact cars.

When it was first brought to the U.S. in 2008 by dealership mogul Roger Penske, the smart car promised tiny, fuel efficient transportation for young urban Americans. It came at a time when fuel prices were headed toward record highs, and the country was heading toward recession.

But the vehicle also asked a lot of buyers. It was tiny: the only model sold in the U.S. had just two seats and very little trunk space. It got good gas mileage, but did not offer enough of an advantage over conventional compact cars to justify sacrificing the space and convenience of a conventional four-seat vehicle.

U.S. sales in the car's first year were just under 25,000 units, but fell from there, bottoming out at a mere 1,276 in 2018. Sales in Europe were far higher at around 97,000 in 2018, but still not enough to make money for Smart parent Daimler, which some analysts estimate is losing around $500 million a year on the brand.

In 2019, Daimler partnered with Chinese automaker Geely to produce electric Smart cars at a factory in China. The move is expected to slash Smart's labor costs — the cars are currently built at a factory in Hambach, France, where labor is relatively expensive compared with China.

It will also give Daimler a chance to sell the Smart cars in China, the world's largest car market. The Chinese government is also keen to promote electric vehicles to reduce severe pollution problems. Daimler can also leverage Smart's association with with Mercedes-Benz, which is popular among Chinese buyers hungry for European luxury names.

Source link
Read also:
Business Insider › Automobile › 2 months ago
Car-maker Mercedes-Benz will join the ranks of multibillion-dollar startups like Bird and Lime and bring out an electric scooter. The scooter is being developed in partnership with scooter manufacturer Micro. Mercedes-Benz didn't give much detail about...
Business Insider › Automobile › 1 week ago
Freedom Vans converted a Mercedes-Benz Sprinter into a tiny home on wheels named "Fitz Roy" for a woman who planned on living out of her van while traveling across North America. "Fitz Roy" was named after the new owner's favorite Patagonia mountain...
Business Insider › Automobile › 1 month ago
Nomad Vanz has created Jupiter, a bright-red custom tiny home on wheels. Jupiter was built on the chassis of a red Mercedes-Benz Sprinter van with a 144-inch wheelbase and a high roof. The van includes features like a dog barrier, toilet, shower, bed...
Business Insider › Automobile › 2 weeks ago
Motorhome maker Winnebago has created the Boldt 70KL, a camper van built on the body of a Mercedes-Benz Sprinter. The Boldt has been optimized for use during all four seasons with the use of insulation, heated holding tanks, and heaters. The tiny home...
Business Insider › Automobile › 2 weeks ago
Mercedes-Benz unveiled the Mercedes-Maybach GLS 600 4MATIC at the 2019 Los Angeles Auto Show on Thursday. The luxury SUV has chrome detailing throughout the exterior, including enormous front grilles. Pricing hasn't been announced yet, but the car will...
Business Insider › Automobile › 2 weeks ago
The 2019 Mercedes-Benz A220 is an entry-level four-door in the luxury carmaker's A-Series lineup, which has only recently hit US shores. The nearly $50,000 car I tested was packed with performance extras and technology. Budget-minded buyers might look...
Business Insider › Automobile › 1 month ago
The Mercedes-Benz Sprinter is one of the world's most popular commercial vans. I've always wanted to drive one. Mercedes loaned me a $65,249 version from the 2019 model year. It was everything I hope it would be — and more. Visit Business Insider's...
Forbes › Finance › 1 week ago
As per Trefis estimates Daimler AG‘s (OTCMKTS: DDAIF) Mercedes-Benz cars and vans make up 60% of Daimler’s top line. The company generates its revenue primarily from its Mercedes-Benz Cars segment which is projected to account for 52.9% of total...
USA Today › Automobile › 2 months ago
Rolls Royce, Porsche, Mercedes-Benz among priciest car brands for 2019
Forbes › 0 month ago
Mercedes-Benz and Mattel are trying to inspire girls to pursue STEM with a new toy car, a fabulous role model, and their new "No Limits" program.
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google