Mercedes-Benz and Geely Holding Formally Establish JV For Smart
The first jointly developed smart BEVs, by Mercedes-Benz and Geely, will be introduced in 2022.
It has taken quite some time since announcing the plan in May 2019, but Mercedes-Benz and Geely Holding finally received regulatory approval and have formally established a global 50:50 joint venture “smart Automobile Co., Ltd.” for the smart brand. The headquarters is located in Hangzhou Bay, Ningbo, China.
The smart brand (part of Daimler) was struggling over the last few years and didn’t show any profits, which forced the German manufacturer to seek a new solution.
The new plan for smart is a joint venture with 5.4 billion RMB ($777 million) of the total registered capital (2.7 billion yuan by each of the partners).
For Daimler, the transaction should not be related to any significant investment:
“The total registered capital of the Joint Venture will be 5.4 billion RMB to transform smart into a leading player in premium-and intelligent electrified vehicles. Both parties will equally contribute 2.7 billion RMB, the share of Mercedes-Benz AG will be mainly covered by the contribution of the smart brand. The global headquarters of the new joint venture has been set in Hangzhou Bay, Ningbo with operational sales functions based in China and Germany.
The objective is simple. Develop next-generation premium electric smart vehicles and expand from solely subcompact models (fortwo and forfour) to the compact segment.
To make it happen, the work will be divided between the partners: Mercedes-Benz will take responsibility for design, while Geely handles the engineering and production in China.
“The new generation of smart vehicles will be designed by the worldwide Mercedes-Benz Design network and developed by the Geely global engineering network. Future production will be located in China. As part of the vehicle-development program, the smart product portfolio will be extended into the fast-growing B-segment that are in line with smart’s brand positioning with a focus on pure premium electric and connected vehicles.
Currently offered smart cars were produced in Europe, which is expected to end soon:
- smart EQ fortwo, produced in Hambach plant France
- smart EQ forfour, produced in at Novo Mesto in Slovenia
The first range of BEVs from smart Automobile Co. will be launched from 2022.
“The board of directors of the new smart joint venture will be made up of six executives with equal representation from both parties. Daimler AG board representatives will include Hubertus Troska, Member of the Board of Management of Daimler AG responsible for Greater China, Britta Seeger, Member of the Board of Management of Daimler AG and Mercedes-Benz AG responsible for Marketing & Sales, 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 board representatives will include Geely Holding Chairman Li Shufu, Geely Holding President, Geely Auto Group President and CEO An Conghui, Geely Holding Executive Vice President and CFO Daniel Donghui Li.
Tong Xiangbei has been appointed the new global CEO of the smart joint venture and will oversee all operations relating to the brand including sales, marketing, R&D, production and after sales. Tong has more than two decades of experience in automotive industry. Before joining the smart joint venture, he has worked for global automotive OEMs both in the United States and in China.”
Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG, said:
“Having received all necessary regulatory approvals we are now ready to start the joint venture with our partner Geely that has been in preparation for the past several months. The joint venture will bring the next generation of zero-emission smart electric cars to the Chinese and global markets. We look forward to continue our collaboration to bring desirable products and services to customers around the world.”
Li Shufu, Geely Holding Chairman said:
“The smart brand has a unique value and global influence, it has grown to be a leader in urban mobility. Geely Holding will fully support the smart brand with its full advantages in R&D, manufacturing, supply chain and other fields into the joint venture and support its development in China and globally. 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.”
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