China’s Geely Automobile Holdings is said to be nearing conclusion of talks with Germany’s Daimler to purchase a 50 percent stake in the latter’s struggling smart microcar division, the Financial Times said.
The Financial Times also added that both companies are expected to make an announcement on the matter before April’s Shanghai Auto Show.
Last year, Geely Automobile Holdings’ parent company Zhejiang Geely Holding Group spent USD 9 billion to acquire nearly 10 percent of Daimler, making Geely the largest investor at Daimler.
Currently, smart has three models in its portfolio – fortwo, forfour, and fortwo cabriolet.
While Daimler’s Mercedes-Benz Cars division set a new sales record for 2018 by delivering 2.25 million vehicles worldwide, the smart brand has been a deadweight dragging down the division’s potential.
Margins on smart’s range of microcars are wafer thin and last year, the brand sold just 130,000 cars worldwide, down four percent from 2017.
Source: Daimler's 2018 financial report
Should Daimler agree to the sale and the deal is approved by the European Commission, the brands parked under Geely Auto Group will grow to five. The four existing brands are: Geely, Lynk & Co, Proton, and Lotus. Swedish brand Volvo Cars is parked directly under Geely's holding company Zhejiang Geely Holding Group.