Smart could start building electric cars in Europe in a bid for increased efficiencies as it ramps up its global expansion plans and fleshes out its line-up.
After production of the Fortwo ended earlier this year at Ineos’s factory in Hambach, France, Smart now builds all its cars in Xi’an, China. But with sales increasing in other markets and the increased costs of exporting worldwide, the brand is considering localised production in other territories to better cater to demand - with the added benefit of avoiding the EU’s new tariffs on Chinese EVs.
Smart Europe CEO Dirk Adelmann told Autocar that the brand being co-owned by Mercedes-Benz and Geely gives it potential flexibility to globalise its operations: "We have a parent company based in Germany with production basically all over the world, but also Geely with other daughter companies has production in Europe and other places in the world.”
He said building locally is “a good idea, if the cost structure is comparable to the cost structure you already have”, and that with Smart entering new international markets “comes the need to at least think about a diversified production footprint, but nothing is decided yet”.
Aside from reducing export costs, building in Europe would also mean Smart could circumvent the punitive 19.9% import tariff that has been imposed upon its China-produced EVs by the EU – although Adelmann was adamant the decision to build in Europe would be a “strategic” one that is “independent of the EU Commission's decision".
Adelmann noted that, in any case, the duties are provisional until the consultation period ends on 2 November 2024 and suggested that Smart wouldn't take any definitive action unless they were confirmed as permanent from that date.
"There's a lot still to be discussed between the European Commission and China in that regard,” he said. “We currently – and I think it has been the stance of Smart over more than 25 years now – do not see protectionism as the answer to today's problems, and we also sincerely believe in and hope that the two continents will find a solution that does not end in a trade war. So we keep our fingers crossed.”
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