Smart dealership in Detroit to close, as Mercedes-Benz dealer will sell its cars

Article by Christian Andrei, on June 21, 2011

A standalone Smart dealership in Bloomfield Hills, an upscale Detroit suburb, will shut down next week as ownership has been transferred to Mercedes-Benz from Penske Automotive Group. The nearby Mercedes-Benz of Bloomfield Hills dealership will then be selling the minicars.

The closure is due to Mercedes’ move last February to take over Smart sales, according to a letter sent to customers. The dealer network had been operated by Penske Automotive Group.

In the letter customers, the Smart dealership's general manager, Shane Reed, said that from July 1, Mercedes-Benz of Bloomfield Hills will be representing the Smart brand in the metro Detroit market. In 2008, the European microcar brand was launched by Penske as an independent distributor.

The Smart brand had been owned by Daimler AG, Mercedes’ parent. Automotive News said that ForTwo had a great start but its sales in the U.S. rapidly plunged.

As gasoline prices rose to record levels in 2008, Penske had terrific sales with Smart, delivering 24,622 cars for that year alone. However, sales in the last couple of years have plummeted.

Sales fell 59% in 2010 to 5,927. For this year through May, U.S. sales of the ForTwo fell to 2,226 units, about 20% lower than the same period last year.

According to the deal revealed last February, Smart's distribution rights and management have been transferred to Mercedes-Benz USA. Of the 79 dealerships that offered Smart cars, 21 didn’t have Mercedes products and will be losing the Smart franchise.

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