Chinese car firm Geely has taken a 50% stake in Smart from Mercedes-Benz parent Daimler, the two companies have confirmed.
Daimler and Geely, which owns a number of brands including Volvo and Lotus, will form a 50/50 joint venture to run the city car firm, which is in the process of becoming an electric-only brand.
Under the deal, production of Smart cars will move to China, with new electric-only models arriving from 2022 onwards. Mercedes-Benz will lead the design and styling of those future models, with Geely leading the engineering.
As part of the new product plan – precise details of which have not been disclosed – Smart will expand into the B-segment. The deal is intended to further develop Smart as “a leader in premium-electrified vehicles”, according to a joint statement from Geely and Daimler.
Geely chairman Li Shufu said “we fully respect the value of Smart”, adding: “As equal partners, we are dedicated to promoting the Smart brand globally.”
Until the new models launch in 2022, current Smart cars will continue to be made at Daimler’s plants at Hambach in France and Novo Mesto in Slovenia.
Daimler will also invest around £427 million in Hambach to ready it for production of a future compact vehicle in its EQ electric range.
The joint venture will be headed by a board of six directors, split evenly between Daimler and Geely.
Financial terms of the deal, first reported by the Financial Times, were not disclosed, and final details of the joint venture are due to be completed by the end of 2019.