Mercedes-Benz enters deal to take over Smart’s U.S. distribution from Penske

Article by Christian A., on February 16, 2011

Mercedes-Benz has entered a deal to take over Smart car distribution in the U.S. from Penske Automotive Group, according to a statement from the two companies. In 2008, Penske launched the European microcar brand as an independent distributor. Smart is owned by Mercedes' parent, Daimler AG.

The French-built ForTwo had a good start but U.S. sales have dropped considerably. Under their deal, Mercedes-Benz USA will take over Smart’s distribution rights and management.

Mercedes-Benz USA CEO Ernst Lieb said that negotiations over details, including when the hand-over takes effect, is expected to be completed by July. The 21 Smart dealerships that don’t offer Mercedes products will lose the franchise, meaning that Smart will have 58 U.S. dealers.

Of the 21 dealerships that will lose the Smart franchise, four belong to publicly traded Penske Automotive. Furthermore, a four-door car that Nissan has been developing for Smart USA has been canceled. Smart USA President Jill Lajdziak will stay with Penske Automotive, the nation's second-largest auto retailer.

Lieb said that Mercedes-Benz will consider Smart as a division, comparable to its Sprinter commercial vehicle unit. Mercedes will appoint a general manager for Smart.

While Lieb confirmed that the agreement was signed last Friday, the financial details have yet to be finalized. Mercedes started the discussions with Penske in early January at the Detroit auto show. Penske had a phenomenal start with Smart, selling 24,622 cars in 2008, as gasoline prices hit record highs.

But in the last two years, sales have plunged. In 2010, sales dropped 59% to 5,927. However, both parties assert that the hand-over is not the result of Smart's shrinking sales.

If you liked the article, share on:

Comments

Recommended

Opel revealed it has sweetened the pot for 2017 Insignia Grand Sport customers with the Opel Exclusive program. Through this program, the brand hopes to introduce a wide selection of...
by - February 22, 2017
Fireball Performance Cars has been known to make the fastest sixth generation LT1 Camaros in the world. Once again it has managed to walk the talk as it hit a...
by - February 22, 2017
The North American unit of German premium carmaker BMW is recalling around 19,000 units of its BMW i3 electric vehicle because of the risk of fuel leak. You may ask,...
by - February 22, 2017
A publication by the U.S. Patent and Trademark Office revealed that Honda is still looking into the Project 2&4 Concept. Officially unveiled during the 2015 Frankfurt Motor Show, the Project...
by - February 22, 2017
Barely a month before its official debut, Hyundai gave everyone a taste of what’s to come with the 2017 Hyundai i30 Wagon. Despite what little was shown, it did not...
by - February 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries