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Old 02-14-2011, 06:00 PM
Bill Wood's Avatar
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Lightbulb Penske bails out of Smart distribution deal, Daimler takes over

Filed under: Etc., Mercedes-Benz, Smart

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!

Gallery: Review: 2009 Smart ForTwo

[Source: Smart]Continue reading Penske bails out of Smart distribution deal, Daimler takes over

Penske bails out of Smart distribution deal, Daimler takes over originally appeared on Autoblog on Mon, 14 Feb 2011 17:55:00 EST. Please see our terms for use of feeds.

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02-14-2011 06:55 PM

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Old 02-19-2011, 10:49 PM
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I don't blame Penske for bailing.

Introduced to the market too late.

Gets lousy mileage for its size.

If the 3 Cyl. Turbodiesel had been offered I suspect they would have sold 2 to 3 times as many.

Then there is the Dollar V. Euro exchange rate problem.

I wonder how much Penske lost on the deal?
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Old 02-20-2011, 12:50 PM
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I think Penskes limited ability to market the vehicle, compared to what Mercedes can potentially do anyways, is also a big factor. Think about it....when was the last time you saw a SMART commercial? Now think about how many Mercedes commercials you see every day. Most SMART sales seem to be word of mouth.

My one worry about this deal is whether or not it will hurt Mercedes Brand image. I can see Sprinters on a dealer lot but I have a tough time envisioning SMARTS on the same lot.

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