Mercedes-Benz and Zhejiang Geely Holding Group (Geely Holding) have formally established the global joint venture ‘smart Automobile Co’ for the smart brand after receiving the regulatory approvals.
The total registered capital of the JV will be 5.4 billion RMB (Rs 5,600 crore) 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 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.
The board of directors of the new smart JV 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.”
Commenting on the Mercedes-Geely JV, David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, said: “This deal makes a lot of sense for both carmakers, yielding benefits as electrification gathers pace in the global auto industry. China’s 25 million unit annual light vehicle (LV) market is shaping up to be at the epicentre of this transformation over the next decade.
“For Mercedes-Benz, it reinvents the Smart brand – a brand that has had limited success as an urban small car niche player – as an all-electric specialist. Moreover, it shifts the manufacturing base for the brand to China from 2022. That in itself would be a good move given the importance of the Chinese market for future sales of electric vehicles (EV), but it has also selected a well-established local partner for the venture.
“Back in Europe, it also has the opportunity to repurpose the current Smart Hambach plant and dedicate it to the emerging Mercedes EQ electric sub-brand – which is about larger and more premium electrified vehicles than Smart.
“Geely gets the benefits of working closely with a German premium maker in the venture – both in joint design and development of future electric Smart models themselves and in the delivery of new mobility services to future customers via the Smart brand. This latest venture deepens the cooperation between the two – there is also a JV agreement to provide ride-hail mobility services in Chinese cities."
Also read: Tong Xiangbei appointed new global CEO of ‘smart’ brand