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Daimler propped up Smart for two decades of losses before handing it to Geely
Daimler's micro-car brand never made money in nearly two decades. In 2019 Daimler handed half of it to Geely and moved production to China.
Daimler · Smart · Geely · 2019-03-28
What happened
Daimler bet in the late 1990s that the world wanted a tiny, premium two-seat city car, and built the Smart brand around that idea. The bet never paid: Smart was 'still not profitable after two decades of losses.'
By 2019 the numbers were bleak. In the US, Smart sold just 1,276 cars in 2018, down 58.5%, and Daimler executives had openly considered killing the brand off entirely.
Instead Daimler chose a rescue: on 28 March 2019 it announced a 50/50 joint venture with China's Geely, with production to move to China from 2022. The brand was kept alive but effectively handed over.
The lesson of the micro-car bet repeated itself — a niche product with a premium price and a cramped cabin never found enough buyers, and the parent spent two decades funding the gap before retreating.
Why it happened
- The premium micro-car pitch — tiny, expensive, personal — never found a mass market, so the brand ran two decades of losses with no profit on the horizon
- US sales of 1,276 in 2018, down 58.5%, left a market position so thin Daimler weighed killing the brand outright
- The Geely joint venture and the move to China was a retreat from the brand's founding premise, done to cap the losses instead of chasing the original dream
The lesson
A brand idea that does not find its market in the first years rarely finds it in the decades after. Daimler spent twenty years funding a niche that never scaled instead of cutting it early.
Sources
- Electrive — The future of Daimler's Smart secured with Geely (Mar 2019)
- CNET Roadshow — Daimler-Geely Smart joint venture (Mar 2019)
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