Mercedes & Geely joint venture for Smart ready to go
The China joint venture between Mercedes-Benz and Geely around Smart announced at the end of March last year has now been formally established with all relevant final approvals from Chinese authorities. The first electric Smart cars made in China are to be launched on the market in 2022.
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The JV called Smart Automobile Co, Ltd. will be endowed with a total capital of 5.4 billion RMB (about 700 million euros). Both parties will contribute 2.7 billion RMB each in equal parts, “with Mercedes-Benz’s share consisting mainly of the contribution of the Smart brand,” the German group stated in a press release.
The joint venture headquarters will be located in Hangzhou Bay in the coastal city of Ningbo, and “operational sales functions” will be managed from both China and Germany. Tong Xiangbei, a manager with experience with car manufacturers in both the USA and China has been appointed global CEO. Xiangbei will initially be responsible for all activities relating to the brand – i.e. sales, marketing, research & development, production and after-sales.
Daimler also directly confirmed the plans for a new model announced in March. “The joint venture will bring the next generation of zero-emission smart electric cars to the Chinese and global markets,” the manufacturer said. The first fully electric Smart models from Chinese production are to be introduced from 2022 onwards after which European production of the small car will be phased out. As a kind of compensation, the Hambach plant will produce an electric model of the Mercedes-Benz compact class.
The joint venture’s upcoming vehicles are to be “designed by the worldwide Mercedes-Benz design network” and developed by the “global engineering network of Geely”. Mercedes-Benz influence on the technology of the new models will, therefore, decrease – just how much will only be clear with the new models.
Although the new Smart CEO Xiangbei did not make any comments in the official press release from Mercedes, Daimler CEO Ola Källenius commented that he is looking forward to continuing the cooperation with Geely. Geely’s chairman Li Shufu emphasises the “unique value and worldwide recognition” of the Smart brand. “We will work together with Mercedes-Benz to transform the smart brand into a leading player in urban premium, electric and connected vehicles to successfully develop the brand’s global potential,” he said. Geely is Daimler’s biggest shareholder with a stake of almost 10 %.
The Supervisory Board of Smart Automobile will be composed of three representatives from each side. From Daimler, this will be Hubertus Troska (Daimler China Board of Management), Britta Seeger (Board Member for Marketing and Sales at Daimler and Mercedes-Benz), and Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG responsible for Group Research and Mercedes-Benz Cars Development. Geely is represented on the Supervisory Board by Li Shufu himself, An Conghui (President of Geely Holding and President and CEO of Geely Auto Group) and Daniel Donghui Li (Executive Vice President and CFO of Geely Holding).
Update 27 July 2020: The new start of the Smart brand in the form of the joint venture is now taking on more concrete form. Mercedes-Benz and Geely have confirmed the global management team of the Smart Automobile joint venture. CEO Tong Xiangbei, who was initially responsible for all activities himself, will in future be supported by a classically divided management team: Daniel Lescow will become Vice President of Sales, Marketing and After Sales, Ulf Nestler will work as Vice President Finance and Chief Financial Officer and Jun Yang will take over technical development as Vice President Research & Development. Lescow and Nestler both come from Daimler and Smart respectively and already have a lot of experience in China. Jun has previously worked for various subsidiary brands of Geely Holding.
In addition, the subsidiary Smart Europe was founded, and is based in Leinfelden-Echterdingen near Stuttgart. The limited company takes over sales, marketing and after-sales in Europe. In addition to the vehicles, Smart Europe will also provide various services. Managing Director of Smart Europe will be Dirk Adelmann, who was already involved in the repositioning of Smart as an electric brand.