Mercedes-Benz will take over smart sales in U.S.

By KBB.com Editors on February 15, 2011 1:47 PM

The smart saga has included a number of twists and turns since the diminutive ForTwo model first went on sale here back in 2008. The latest chapter, while still being written, will soon see marketing and distribution rights pass from the Penske Automotive Group to Mercedes-Benz USA. According to Mercedes, the move is being made for two principal reasons.

Last fall, Daimler AG, parent company to both Mercedes and smart, consolidated operations of the two under M-B control in every other world market. By mid year, that will be true here as well. Even more critical than establishing this global consistency, Mercedes believes that bringing smart "in-house" will allow more effective leveraging of its own far more robust marketing assets and capabilities. That's become a far more critical concern since the fortwo's 33/41-mpg EPA numbers figure into M-B's overall CAFE (Corporate Average Fuel Economy) requirements as will the green MPGe equivalents of the just-introduced smart fortwo EV. After selling nearly 25,000 units here in 2008, fortwo volume tumbled to less than 6,000 last year and this strategic realignment was the "smartest" way to help bump those volume numbers back into five-digit land -- and allow Mercedes-Benz USA to meet the even-more-stringent CAFE demands that will take effect in 2016.

The agreement will see the Penske Automotive Group continue to sell smart vehicles at its 55 dealership that also handle Mercedes-Benz but terminate its franchise agreements with 17 other stand-alone outlets. Mercedes says it will undertake a measured expansion of the smart distribution network among its existing dealers, focusing on locations most likely to help grow the business. While a Mercedes-Benz USA spokesperson confirmed that longer-term plans to co-develop small -- and likely future smart -- vehicles with Nissan remain in effect, the previously announced smart five-door model that was based on Nissan's new Global V platform architecture and slated to go on sale here in the fall has been cancelled.

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