Daimler wants to decide this year about the future of its small car brand Smart. Under the incoming new CEO Ola Källenius, the little car may fall victim to pressure to make savings at Daimler. Smart boss Katrin Adt is already looking for a partner in China to lower costs.
At least this is the difficult future the Handelsblatt has made out for Daimler’s smallest car offering. The newspaper quoted an insider saying on the new boss that “Ola has no history with the Smart”. The source went on to say that Källenius would probably have no scruples about burying the little car if deemed necessary, especially as his background lies with AMG.
The story looked a little different under Dieter Zetsche, who had last appointed sales wizz Katrin Adt as the new Smart boss last autumn. Her job is to put the company back in the black with Smart after two decades of constant losses. But after six months in office, she still has no concrete strategy at hand, according to Handelsblatt. The fact that Daimler’s overall profit fell by 30 per cent last year does not make a positive decision for the future of Smart any easier. “We have other issues,” a high-ranking Daimler manager was quoted as saying. And to make matters worse, Daimler CEO Dieter Zetsche, the most important advocate for the brand, is retiring. Only in October, industry insider, Georg Kacher had pointed out that the future of the Daimler brand stands on shaky legs.
In between, however, Smart had been forward-looking when announcing complete electrification in Europe and the US for example (we https://www.electrive.com/2018/04/09/smart-is-going-it-all-electric-in-europe-too/). The last Smart with a combustion engine rolls off the production line in the middle of the year, and the last orders for ICEs in Europe will be accepted until 31 March. However, even the cheapest electric Smart with around 22,000 euros is not a bargain, at least not for a car of this size.
To reduce costs, Katrin Adt is looking for a partner and also producing in China reportedly. Industry circles reckon that Daimler would negotiate with its long-standing joint venture partner BAIC. There are also talks with Geely. “The future of smart lies in the Far East, quite clearly,” confirms one manager. In definitive terms, Daimler will not produce the next generation of the two-seater together with Renault in Hambach, France, any longer but in China. Smart previously shared a large part of the technology with Renault, but the cooperation is on hold and apparently on the verge of collapse because none of the parties wants to continue working on the small (electric) vehicles together.
handelsblatt.com (in German)
Additional reporting by Nora Manthey.