Mercedes-Benz’s US operation (MBUSA) has announced it will be taking over distribution rights, management and sales for smart USA from Penske Automotive Group by the end of June this year.
“Aligning Smart distribution with Daimler, as it is worldwide, is the logical next step for the smart brand in the US. This alignment will enable the smart brand to grow through the Mercedes-Benz dealership network and lead the way in conservation and meeting future fuel economy standards,” said Penske’s chairman Roger Penske in a statement.
MBUSA is in the early stages of the transition phase and could not offer any substantive comment on what the move would mean for finished vehicle distribution patterns or the impact on carriers.
The decision to integrate smart USA with MBUSA follows last year’s reorganisation of the Smart brand, which is now managed independently but is fully integrated into the Mercedes-Benz Cars division of Daimler. The parent company integrated smart into the Mercedes-Benz unit in September 2010 and the US is currently the only market in which Smart and Mercedes operate separately.
Two-thirds of current Smart dealers also handle Mercedes-Benz and they will continue to sell Smart vehicles said a company spokesperson. MBUSA has invested $250m in its dealerships as part of the Autohaus initiative for facilities enhancement, on top of the $1.4 billion invested by the dealers themselves over the past two years despite the impact of the economic crisis. The remaining dealers have agreements with Penske and it remains to be seen what decision will be taken there.
Smart distribution in the US involves the ForTwo microcar, and the ForTwo electric version. The Smart entered the US market in January 2008 when Daimler struck a deal with Penske. But sales have fallen badly recently, down nearly 60% last year to 5,927 cars.
“We are very excited about working toward integration of smart into the MBUSA organisation, and look forward to working with our dealer partners to exceed customer expectations for this unique vehicle,” said Mercedes-Benz president and CEO, Ernst Lieb. “The addition of smart, combined with our Autohaus dealer initiative, will help us build upon the tremendous momentum the Mercedes-Benz brand had achieved here in the U.S.”