Penske Cuts Ties to Smart USA, Mercedes-Benz Steps In

Just four months after revealing production plans for a four-door vehicle intended for the North American market, Penske Automotive Group said it would relinquish control of Smart USA to Mercedes-Benz USA. The announcement was made in a jointly released statement on Monday. Under the terms of the deal, Mercedes would assume distribution, marketing, sales and management responsibilities in the second quarter of 2011.

Penske has held exclusive rights to sell the Smart Fortwo coupe and convertible since 2007. The company also began distributing a lease-only, purely electric Fortwo late last year. Under Penske, Smart USA sold more than 45,000 vehicles to American customers, and in 2010 delivered 5,927 units.

Smart customers’ warranties and servicing needs should not be affected by the news. “The phrase to use is ‘business as usual’ for customers,” said Anthony R. Pordon, Penske’s senior vice president, in a telephone interview on Tuesday. “Daimler already does and will continue to administer the warranties,” he said, referring to the parent company of Mercedes and Smart, Daimler AG.

Mr. Pordon is not so unequivocal about the news’ impact on dealers. “Approximately two-thirds of Smart dealerships are already aligned with Mercedes-Benz dealerships, which leaves about a third, about 17, that might go away,” he said.

The announcement was quickly viewed by analysts as a way for Mercedes-Benz to defuse pressure associated with meeting 2016 Corporate Average Fuel Economy, or CAFE, standards, whereby automakers’ fleets are expected, in aggregate, to average 35.5 miles per gallon. Increasing sales of Smarts — the Fortwo has a 41 m.p.g. highway rating from the E.P.A. — could help to lower Mercedes’ fleet average, which in 2008 was the lowest of any automaker operating in the United States.

In October, Smart USA announced plans to develop a four-door vehicle by leveraging its relationship between Daimler AG and Renault-Nissan, the conglomerate with whom Daimler committed in early 2010 to share a measure of vehicle architecture, engines and procurement costs.

“It’s gone. We canceled it yesterday,” Mr. Pordon said of the four-door project. “Mercedes-Benz obviously won’t have a Nissan-built vehicle in its product lineup.” Mr. Pordon did say, however, that he believed a Smart-branded project between Mercedes and Renault-Nissan would go forward at a later date.

Mr. Pordon also confirmed that Jill Lajdziak, Smart USA’s president, will retain her position until the transition is complete, adding that Ms. Lajdziak intended to remain at Penske, but he did not speculate about her future role within the company.

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