
Large car makers need CAFE credits going forward as mileage standards increase.
Mercedes-Benz USA LLC and Penske Automotive Group (NYSE:PAG) today announced they have started discussions to return the distribution rights, management, and sales and marketing activities of Smart USA from Penske Automotive Group to Mercedes by the end of the second quarter of 2011.
Penske has sold more than 45,000 of the two seat Smart vehicles during the past three years through 75 Smart retail centers in the United States and Puerto Rico.
Smart had U.S. sales of 5,927 in 2010 compared with 14,595 in 2009, a -59.4% decrease. The tiny two-seat car, designed by Mercedes more than 20 years ago, is struggling in the marketplace. However, credits for the sale of small cars will be crucial going forward for makers of larger, gas guzzling luxury cars as regulations tighten.
“Aligning smart distribution with Daimler, as it is worldwide, is the logical next step for the Smart brand in the U.S. said Penske Automotive Group Chairman Roger Penske.
Smart USA is currently placing 250 Smart ForTwo electric drive vehicles across the United States with companies, municipalities, organizations and individuals interested in conservation and environmental awareness. The Smart EV will not be widely available until 2012 in the U.S. when a badly needed next generation Smart is due to appear.
“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.
Mercedes reorganized Smart last year in Germany as an independent business subsidiary of Daimler AG.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
16 February 2011 – The Penske Smart distribution business had after-tax losses of $5.8 million ($0.06 per share) and $15.9 million ($0.17 per share) in the three and twelve months ended December 31, 2010, respectively.
Results for the fourth quarter and full year include after-tax expenses of $2.7 million ($0.03 per share) and $3.6 million in ($0.04), respectively, relating to the development of the five-door vehicle previously designed for distribution through the Smart USA dealer network. This vehicle is now canceled.