Wednesday, February 16, 2011

Smart car takeover will close Nashville store, end Nissan deal

The Penske Automotive Group will hand over distribution of the Smart mini-car brand in the United States to Smart parent Mercedes-Benz, a move that will strip the Nashville dealership of its franchise.

Also in connection with the shift, Smart is canceling previously announced plans to sell a re-badged four-door Nissan vehicle in North America that was to have been produced at a Nissan factory in Mexico.
It would have added a four-passenger car to the lineup; the only vehicle Smart sells now is the tiny ForTwo model.

Mercedes-Benz said that in taking over the Smart brand from Penske, it will move sales of Smart cars to its U.S. Mercedes dealer network, and will drop the 21 U.S. Smart dealers that are not now connected to Mercedes-Benz dealerships.

That would include the Smart Car Center of Nashville, at Rivergate, which is operated by Tom Bannen Chevrolet. Bannen picked up the Smart franchise after an earlier deal with another auto dealer fell through. The store opened in a separate showroom next to the Chevy dealership in May 2009, more than a year after Smart began selling cars in the United States.

“That would be us,” Carl McNickel, training manager for Smart Center of Nashville, said after being informed that non-Mercedes-affiliated Smart dealerships would be canceled. “That’s not good news.”

There was no immediate word as to when the Bannen dealership would close, or whether Mercedes-Benz of Nashville, in Franklin, would pick up the Smart franchise here. It’s the only Mercedes dealer in Middle Tennessee.

But Mercedes-Benz said the main reason it’s taking the brand back from Penske is so it can include the fuel economy ratings of the Smart ForTwo in its U.S. corporate average fuel economy ratings as federal mileage standards rise dramatically over the next few years.

Sales of the ForTwo, whose mileage is 33 mpg city/41 highway, could help offset sales of high-power Mercedes vehicles with poor fuel economy when calculating the company’s average fuel economy.

Nissan and Smart Cars U.S.A., the Penske distribution network, had announced in October that Nissan would produce a four-door subcompact model for Smart to sell in the United States beginning late this year.

Because it’s handing Smart over to Mercedes, “Penske has made the decision to terminate the agreement with us,” said David P. Reuter, spokesman for

Franklin-based Nissan North America, Inc. “Nissan will be compensated for any pre-development work on the program, and all work will stop at this point.”

The car that Nissan was going to provide Smart was to be a version of a vehicle Nissan already sells in Asia and Europe. Nissan will begin producing that car next month at its plant in Aguascalientes, Mexico, for sale in Mexico and other Latin American countries, Reuter said, but has no plans to sell the vehicle at its U.S. dealerships.

Mercedes, though, is developing a four-door Smart model with Nissan and Renault in Europe, and that car eventually will be sold at U.S. Smart dealerships.
Smart’s U.S. sales fell to just 5,927 cars last year after a high of 24,622 in 2008, which it was aided by high fuel prices.

Contact Tennessean automotive writer G. Chambers Williams III at 615-259-8076 or

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