Smart Mini Car To Be Sold At U.S. Mercedes Dealers

DETROIT (AP) — Coming to a Mercedes-Benz dealer near you: Those tiny Smart cars.

Daimler AG says its Mercedes-Benz USA unit plans to take over United States distribution and marketing of the Smart mini car brand from dealership chain Penske Automotive Group Inc.

Daimler said Tuesday the two companies have started discussions on the transition, which is expected by the end of this year's second quarter.

Bloomfield Hills, Michigan-based Penske had been trying to distribute the cars through a 77-dealer network, but sales of Smart USA's only model, the two-seater fortwo, continued to nosedive.

They were down almost 60 percent last year to just under 6,000 nationwide as gas prices stayed around or under $3 per gallon for much of the year. The drop came as U.S. car and truck sales overall rose 11 percent for the year.

Mercedes also needs Smart cars to meet more stringent U.S. fuel economy standards that will rise to a nationwide fleet average of 35.5 mpg by 2016. The fortwo gets 41 mpg (17.4 kpl) on the highway and has a starting sticker price of around $12,000. An electric fortwo also is in the works.

Penske began selling smart cars in the U.S. in 2008. They initially drew praise for their fuel-efficiency and pint-sized appearance, and were marketed toward buyers in urban areas for their maneuverability and ease of parking.

Penske Chairman Roger Penske says that "aligning Smart distribution with Daimler, as it is worldwide, is the logical next step for the Smart brand in the U.S."

Penske, a former race car driver, had signed a deal for Nissan Motor Co. to build a new larger version to the smart lineup to boost sales of the suffering brand, but a spokesman said that deal now has been scrapped.

Last year Daimler integrated Smart into the Mercedes-Benz business unit.