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2009 Smart Fortwo Click above for high-res image gallery

So much for Valentine's Day. Penske and Smart have jointly announced that the couple is going their separate ways.

Penske is walking away from it distribution rights, management, sales and marketing duties, but that doesn't mean the brand is going anywhere. From now on, the pint-sized city movers will be peddled by Mercedes-Benz USA, and Smart says the move is just one part of a greater growth strategy. In a letter to owners, Smart said that all warranties will still be valid and that all of the transition kinks should be ironed out by as soon as June of this year.

Talk about a quick rebound.

Daimler handles Smart distribution the world over, so the move makes sense for the troubled brand here in the States. Hobbled by low fuel prices, Smart sold around 100,000 units globally last year. In comparison, the company managed to move 114,000 vehicles amidst the world-wide recession of 2009. A paltry 5,927 Fortwos were sold in the U.S. in 2010.

Rumors have cropped up around a number of planned new models for the company, including a ForTwo+2 as well as a five-door hatch. Hit the jump for the full press release as well as the company's letter to current owners. Thanks for the tip, Vince!

[Source: Smart]
Show full PR text
Mercedes-Benz USA Intends to Transition the Distribution of smart from Penske Automotive Group
MONTVALE, N.J., Feb. 14, 2011

Mercedes-Benz USA (MBUSA) and Penske Automotive Group (NYSE: PAG) today announced they have started negotiations to transition the distribution rights, management, sales and marketing activities of smart USA from Penske Automotive Group to Mercedes-Benz USA. The transition is expected to occur by the end of the second quarter of 2011.

The proposed change marks a further step in implementing the future growth strategy of the smart brand. It also reflects last year's reorganization at smart headquarters in Germany, where smart is now managed as an independent brand, but is fully integrated into Mercedes-Benz Cars business unit of Daimler AG.

"We are very excited about working toward integration of smart into the MBUSA organization, 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 has achieved here in the U.S."

"Introducing the smart brand to the U.S. has been a unique opportunity for us," said Penske Automotive Group Chairman Roger Penske. "Over the last three years I've experienced the passion consumers express for the brand as we delivered over 45,000 vehicles. Aligning smart distribution with Daimler, as it is worldwide, is the logical next step for the smart brand in the U.S. 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."

The addition of the fuel efficient smart fortwo and smart fortwo electric vehicles to Mercedes-Benz USA's product portfolio underscores the company's commitment to meet even more stringent fuel economy standards in the future. The smart fortwo achieves EPA estimated 41 mpg in highway driving. Manufactured by Daimler AG, smart is currently sold in more than 40 countries, and more than 1.2 million smart fortwo have been sold worldwide since 1998. Since then, smart has established itself as the think tank for urban and electric mobility for Daimler AG and plays an important role in the Corporation's plans to make innovative future mobility concepts such as car2go available in Europe and the United States.

Dear smart Owners,

I wanted to take a moment and let you know that today Penske Automotive Group announced plans to transition the smart USA business to Mercedes-Benz USA. It was important to us that you hear this news from us and not via news reports.

As a loyal smart owner this is good news for you. The brand will continue under the responsibility of Mercedes-Benz USA, a natural home for the smart brand given the product is designed and engineered by Mercedes-Benz. This transition will be seamless for you. You will be serviced in your market as you are today. Your warranty does not change. We are working through all the transition details which we anticipate to be complete by no later than the end of June. We of course will continue to have open dialogue with you through the next few months and please do not hesitate to reach out to us if you have questions.

Thank you for your continued loyalty to smart.

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    • 1 Second Ago
      • 4 Years Ago
      They never made sense here in the Milwaukee area. MAYBE if the dealer was downtown or on the east-side where all the colleges are, but no, it's way out on the north-west side of the city, where the roads are wide and the speed limits high.

        • 4 Years Ago
        Even the downtown has easy to navigate streets and adequate parking with the refurbished warehouse district. I must say of all the cities ive lived in Milwaukee was one of the easiest to drive in due to polite drivers combined with adequate space.
        • 4 Years Ago
        Milwaukee, polite drivers?

      • 4 Years Ago
      I hate these s boxes and I just about braked checked somebody in one last week going into my parking lot- but it was her stupid fault- I had my signal on and she just stuck on my bumper...duh. The signal was on for awhile. I wish she would have just creamed the piece of s on my already ruined bumper. These cars should be illegal in the US and should never have been certified.
      • 4 Years Ago
      He almost bought Saturn from GM.
        • 4 Years Ago
        Though I would argue Saturn had a better chance of surviving than Smart, given all the dealer goodwill the marque brought with it.
      • 4 Years Ago
      I can honestly say I am not surprised. Everything I have heard and read about Penske is that he is a brilliant auto business man. And the more I read about Smart sales lagging I always thought this was the one (big) mistake he'd made in his career and he'd be getting out of it as soon as possible.
        • 4 Years Ago
        Penske was going with his financial analyst's advice. In 2008 the price of oil seemed destined for $200 a barrel by year's end. Then the economy fell apart (I don't think Penske saw that coming).
        • 4 Years Ago
        Exactly. Penske is a brilliant man, but I never did understand why he figured this would work. The Smart car is a piece of crap.
      • 4 Years Ago
      Probably half of those were sold in San Francisco. They are quite common here, where one routinely sees them take advantage of parking spaces that no other car could use.
      • 4 Years Ago
      I think they're ready to have a fork put in them.
      • 4 Years Ago
      What is Dieter Zetsche doing? Smart is the definition of how NOT to run a car company. The car has 1 platform that is unsharable to other vehicles, built by itself in one very large and expensive plant. The car has terrible driving dynamics, shifts horribly, poor fuel economy and the unshakable stigma of "death trap" from the general public.

      They touted a "face lift" for 2011...what did they do? Switched the dash layout around and offered an optional touch screen navigation system that is garbage and doesnt even work unless the car is in park and shuts the music off when the nav is yelling at you in pseudo German-English.


      How to repair it? Well first of all, you didnt need to form an alliance with Nissan to get a platform for the thing as you already have the new B platform (and variants) which will have 4-6 cars based on it (including the new A-class). Your SOHC 1970's tech 2.0L 4cylinder from the B200 sucks, so you'll need engines from someone else..or I hope you already have a new line of 4 cylinders for the B-cars in development, use that (I'd suggest a turbocharged and direct injected 3 cyl but its clear you want to spend as little as possible on this, so put a 4 cylinder in it that doesnt require trips to redline in every gear just to keep up with traffic). Then build other cars in the same plant to use up capacity and share costs.

      Fully electric cars are a joke and still years away until they see viability, so forget that angle..Once the tree huggers buy theirs and the gov't pulls the incentives you'll be in the same boat you are in now.

      Spread the costs across the board with other MB or Nissan cars and for gods sake, build a competitive product when you do.

      A smooth transmission and even 60 MPG would maybe see 5-10%~ increase in sales in the current car, so you gotta start at the bottom on this one.

      But remember these words "Long term sustainability...not Short term reduced CAFE fine payments"
      • 4 Years Ago
      "Hobbled by low fuel prices, Smart sold around 100,000 units globally last year. "

      Hobbled by low fuel prices? BS! More like hobbled by craptactular driving dynamics, disappointingly low fuel economy given the size and pitiful performance, topped off by the weakest warranty in the market. Gas could be $7 a gallon and the FourTwo would still languish on dealer lots.

      I'm not just spewing opinion based on the way the car looks or what I've read elsewhere. I actually drove a FourTwo for a couple days. I wanted to like it, I really tried. But it was truly the most awful car I've driven in a long time and I'm in a business where I get to drive a lot of them. The transmission was awful, the ride brutally choppy, the handling miserable, and the freeway manners downright scary.

      I'm sure Roger has calculated that the imminent North American launch of the Fiat 500 is the death-knell for the Four-Two in this market. The Fiat is nearly as small but vastly superior in almost every way. The only thing the Smart is better at is being small...and even at that its only a little better.
      • 4 Years Ago
      "...all of the transition kinks should be ironed out..."

      Great. Now if only they could fix the car's TRANSMISSION kinks.
        • 4 Years Ago

        The lack of a proper manual transmission keeps it out of consideration for me. Not that I'd buy it anyway, but if you're looking at things like Fiat 500s and Minis, this might be a consideration. Again, with a MANUAL. The kind that comes with a freakin' clutch, now that the world (outside of C&D) makes me specify.
      • 4 Years Ago
      I am thrilled that my Smart has transformed into a Mercedes...Those who badmouth my nice car can now stuff it...
      • 4 Years Ago
      It's too expensive, too unpractical and too ill-conceived to be a true fashion item.

      Yet Daimler will never give it up, never let it down and never desert it.
      • 4 Years Ago
      Smart move, Mr. Penske, smart move. Pun intended, of course.
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