Chrysler selling Smart car designs to Piaggio??!

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Chrysler selling Smart car designs to Piaggio??!

Postby Micronaut » Tue Jan 24, 2006 5:55 pm

http://www.channel4.com/4car/news/news- ... s_id=13790

Industry: Smart to be sold to scooter-maker?
24 Jan 06 16:02

Smart Fortwo
DaimlerChrysler has offered to sell its Smart division to Italian scooter-maker Piaggio, reports Automotive News Europe.

Piaggio, which also makes tiny commercial vehicles such as the Ape three-wheeler, is said to be considering the deal after an approach by investment bank Goldman Sachs, hired by DC to act as an agent.

Piaggio is said to have been offered the Smart brand name, the Smart plant in Hambach, France and all its tooling, the intellectual property for existing and upcoming vehicles, and even a large low-interest loan to cover the cost of a relaunch, in a dowry deal similar to that given by BMW when it sold off MG Rover.

Smart is reported to have suffered losses of ¬600m last year and has not yet been profitable since its launch in 1998. Total losses now exceed €4bn; sales of the Forfour supermini have been well below targets, and the roadster range was recently axed. Plans to launch a small 4x4, the ForMore, were also abandoned and DC has continually stalled on a decision to launch the Smart brand in the US, despite evidence that there is strong demand for its two-seaters in cities such as New York and San Francisco.

Piaggio may not be the only potential buyer, either. Suzuki is also reported to have shown an interest, as has India's Tata Motors. Suzuki has denied these claims, however, and DaimlerChrysler continues to deny that it is considering selling Smart at all. CEO Dieter Zetsche reiterated at the Detroit Motor Show that he intended to make Smart profitable by 2007 and that the brand was not for sale. The official line on the involvement of Goldman Sachs is that the company was engaged to act as a 'buffer zone' and filter 'unsolicited requests' to buy Smart. However, Zetsche admitted that 'we would be open for potential partnerships,' or joint ventures with other firms.

Analysts have commented that the most difficult prospect Smart faces is the closure of the Hambach plant, saying that the brand will only become profitable if production is moved to a cheaper country. The move will be prohibitively expensive, however, due to European labour legislation and required redundancy payouts to the plant's unionised workers. This could make a joint venture option, with another manufacturer sharing the production costs, a more likely scenario.
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Micronaut
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