Saturday, May 31, 2008

Smart Cars are a Mercedes Benz model

There is a misconception that the Smart for Two or Smart Car is manufactured by Swatch and Mercedes Benz. Swatch actually exited the joint venture some time ago due to huge losses. The joint venture lost over 4 billion Euros. Mercedes now exercises total control over Smart car production.

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The firm that manufacturers Smart Cars is Mercedes Benz. The parent company is Daimler AG. So technically and semantically, the Smart for Two is a Mercedes Benz. Mercedes Benz makes this clear in Europe but would rather not publicize this fact much in the U.S.

I live next door to a Mercedes Benz dealer and they display Smart cars in the same showroom as Mercedes Benz, albeit with bold colors and younger, more hip car dealers. I have only seen other Smart car showrooms in Mercedes Benz dealerships. There may be stand-alone Smart Car dealerships I just have never seen them in the U.S. Smart Cars are sold in at least 25 countries.

Now that gas prices are spiraling out of control the decision to take full-control of Smart GmbH looks like a real smart decision for Mercedes.

Smart Cars have been common in Europe for several years now. I started seeing them in 1998. I now notice them everywhere in Europe and see stand-alone dealerships as well as models displayed inside Mercedes Benz showrooms. They are rarely displayed side-by-side. I only saw that once, at a Mercedes dealer in Rotterdam, I think.

Smart Cars are made at a plant in Bottrop, Germany, at the site of a famous after-market tuning company called Brabus. Besides work on Smart cars and Mercedes, Brabus also does work on Maybach cars.

Smart Cars are also made at a Mercedes-owned facility in Hambach, France. Daimler, Daimler-Benz, Smart, and Mercedes Benz all refer to the same car manufacturer, at least as far as the EU government sees it. Swatch of Switzerland originally conceived the idea but they are not a car manufacturer. VW and GM vetoed the idea but more profitable Mercedes saw the Smart Car as the answer to an environmental regulations problem (see below). As I understand it Daimler AG pretty much rules the roost at this point.

In Europe Mercedes makes it quite clear that Smart cars are their product. The EU and German governments are putting significant pressure on Mercedes and BMW to increase their small car offerings.

In the EU, car-maker’s average carbon dioxide emissions across their range are expected to be limited to 120g/km by the year 2012. BMW and Mercedes cannot afford to ignore the small car sector, as making more small cars like the Smart car or Mini or possibly even a new joint venture will bring their overall emissions averages down significantly.

The U.S. government under the GOP leadership does not give a damn about carbon dioxide emissions. As far as George Bush and Dick Cheney are concerned the environment can rot while their Texas, Wyoming, and Alaska oil buddies and supposedly blind oil investments rake in record profits. They have undermined the power and authority of the Environmental Protection Agency (EPA) for the past 7 years.

In the U.S., Mercedes Benz has always been more concerned about maintaining their image as a luxury brand. They are under no pressure to decrease carbon dioxide emissions. Buyers of larger Mercedes Benz simply pay an extra luxury car tax on the low gas mileage. This will certainly change under the incoming Democratic Administration.

There were serious concerns among certain Daimler AG investors and executives when Mercedes-branded SUVs started rolling out of Chrysler factories a few years back. I've compared those SUVs to Mercedes top-of-the-line 4-wheel drive models and they are a poor substitute. They are essentially dressed-up Dodge mini-vans and handle mush or much the same. I see many of them sitting on Mercedes back lots and in other storage areas. Large discounts are available for those SUVs but the same is true for all American-made SUVs.

Range Rovers and top Mercedes 4WD models are rarely sale-priced. The same is true for Smart cars and most any ultra fuel-efficient models by any manufacturer, foreign or domestic.

Mercedes recently sold cash-hemorrhaging Chrysler to a private equity firm at considerable loss.

Please note I learned most of this information from the Financial Times, the Economist, BBC,, Le, and other European news sources. U.S. newspapers and commercial television seldom cover European car issues at any depth, especially EU environmental actions. U.S. commercial media is extremely reliant on revenues from U.S. car manufacturer's advertisements. The car manufacturers steadfastly oppose all legislation requiring better gas mileage and lower emissions standards. GM, Ford, and Chrysler are paying a stiff price with huge annual losses for this shortsighted policy. Toyota, with many fuel-efficient models, will soon be the #1 car company, in terms of model numbers sold. Honda will move into 2nd Place by 2010 given the amount of time required by U.S. manufacturers to come up with new models.

A Maryland Public television car program, MotorWeek, does a great job of reviewing European models and discussing various issues. For example this week's show will discuss the Jaguar XF, the 2008 Mini Clubman, and even feature a Land Rover event.


Note: For those readers wondering why I have such an interest in auto manufacturing here is some background. My father was an engineer for General Motors for 33 years. My grandfather, Ivor H. Williams, was an engineer and plant manager for Cadillac, Buick, and Oldsmobile for decades, too. He was one of those responsible for the re-tooling of GM factories for World War Two munitions production. He made tanks, half-tracks, and various aircraft among other items that helped defeat the Axis powers by 1945. My grandmother drove those war vehicles to the rail yards for shipment overseas. Discussion of the auto industry was common in my family home and remains important to me today. I drive a Pontiac G6 GTP.


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TH Williams said...

Thanks, my friend. I write for a living and enjoy giving away pieces that I have also sold to various publications.

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Erik Casper said...

Not just the Mercedes-Benz model but some of other brands too have smart cars. After the first smart car launched, all other brands tried their hand on it and also get succeed. I too had the misconception that you are saying about. So, it is the Mercedes-Benz who manufactured the smart cars. It was great to go through this post and came to know so much. Smarts cars are the best invention in the auto industry till now as they emits less and needs less maintenance. Interested readers may talk to the specialist to know more about it. Smart Car specialist Wilmington NC.