Mercedes-Benz compact car brand smart is now far more promising that it was before thanks to a joint venture between parent company Daimler and Geely, said Mercedes-Benz R&D chief Markus Schäfer, who said that while smart had been successful in terms of customer perception, it failed to be commercially viable, Autocar reported.

It was first reported in March of last year that Daimler had been approaching a deal with Geely for the sale of the former’s 50% stake in the small-car brand, and the two parties announced the formation of a 50:50 joint venture for the ownership and opearation of the smart brand’s model range. Geely became Daimler’s single largest stakeholder following the purchase of a 9.69% stake in the German company in February 2018.

“We need to increase volume. With current volumes, we don’t have scale and we need to be competitive in a world where larger volume, especially in this segment, is extremely important. Working with Geely, we have access to larger scales, Geely’s know-how and close co-operation with Volvo and our know-how of Smart and its history,” Schäfer said.

Both companies are joining forces for product design that is based mainly at Daimler’s headquarters, with teams from both working side-by-side in engineering, he said. “This is a good basis for us to create a scalable platform and enough volume to be successful,” Schäfer noted.

The outgoing fortwo and forfour models have been manufactured at Hambach, France and Novo Mesto, Slovenia respectively. Their successors are due to be introduced later this year, according to Autocar, and a compact SUV is expected to join the compact electric vehicle range in 2022. “We have the genes of the brand, and with engineering and design power, we are off to a good start. Stay tuned,” said Schäfer.