You’ve seen them everywhere. Those tiny, bubble-shaped cars that look like they could fit in your pocket—or at least sideways into a parallel parking spot. For a long time, if you asked who owns Smart car, the answer was easy: Mercedes-Benz. But things got weird.
The automotive world moves fast. One day you’re a German icon, the next you’re a 50/50 joint venture between Stuttgart and Hangzhou.
The Swatch connection nobody remembers
Most people think Smart was a Mercedes brainstorm. It wasn't.
Back in the early 80s, Nicolas Hayek—the guy who basically saved the Swiss watch industry with Swatch—had a vision. He wanted a "Swatchmobile." He wanted a tiny, personalized, stylish city car that used the same colorful, interchangeable logic as his watches. He actually went to Volkswagen first. They passed. Then he went to Daimler-Benz.
They said yes, and Micro Compact Car AG (MCC) was born in 1994.
But Hayek and Mercedes fought. Constantly. Hayek wanted a hybrid or electric drivetrain even back then; Mercedes wanted a traditional engine. Eventually, Mercedes bought him out entirely in 1998. For twenty years, the brand was a subsidiary of Daimler AG. It was their quirky, money-losing younger sibling.
Why the ownership changed
Let's be real: the Smart Fortwo was a engineering marvel but a financial headache. Despite the cult following in cities like Rome and Paris, the brand struggled to turn a profit. High production costs in France and Slovenia didn't help.
Then came the massive shift toward electrification.
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In 2019, Daimler (now Mercedes-Benz Group) realized they couldn't scale Smart alone in a world dominated by Tesla and aggressive Chinese EV makers. They needed a partner with deep pockets and a massive supply chain.
Enter Li Shufu. He’s the chairman of Geely Holding Group. He's also the guy who bought Volvo and turned it into a powerhouse.
Who owns Smart car today?
It’s a split.
Right now, Smart is owned by Smart Automobile Co., Ltd., a 50/50 joint venture between Mercedes-Benz AG and Geely Holding Group.
This isn't just a "paper" partnership. It’s a total reimagining of the brand. Mercedes handles the design—the "look and feel"—while Geely handles the engineering and production. The cars aren't even made in Europe anymore. They come out of a dedicated factory in Ningbo, China.
The Geely influence
Geely is a beast. They own Volvo, Polestar, Lotus, and Zeekr. They know how to build EVs fast and cheap.
When you look at the new models, like the Smart #1 and Smart #3 (yes, they use hashtags now), they don't look like the tiny city cars of the past. They are sleek, tech-heavy SUVs. This is the "Geely effect." They moved the brand away from the "clunky gearbox" reputation of the old gas-powered Fortwo and turned it into a premium electric competitor.
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The software is where you really see the ownership shift. The UI in the new Smart cars feels more like a smartphone than a traditional Mercedes dashboard. It’s snappy. It uses Geely's SEA (Sustainable Experience Architecture) platform, which is the same skeleton used for the Volvo EX30.
Is it still a Mercedes?
Kinda.
Mercedes-Benz Chief Design Officer Gorden Wagener still oversees the aesthetics. If you sit in a Smart #1, you’ll see the "Design by Mercedes-Benz" badges. The materials feel upscale. The ambient lighting is very "S-Class." But under the hood—or rather, under the floorboards where the battery sits—it’s all Geely.
This partnership is actually the blueprint for how many legacy car companies are surviving. They provide the brand equity and design, while Chinese firms provide the battery tech and manufacturing scale.
What happened to the tiny car?
This is the part that bums out the purists. The classic two-seater Fortwo? It’s basically dead in its original form.
Mercedes stopped production of the EQ Fortwo at the Hambach plant in France in early 2024. The plant was actually sold to Ineos (the billionaire Jim Ratcliffe’s company) to build the Grenadier 4x4.
There are rumors, though.
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Smart executives have hinted at a "Project #2" that might bring back the two-seater format. But if it happens, it will be on a Geely platform, built in China, and marketed to a global audience.
Why this matters for buyers
If you’re looking at a used Smart car from 2015, you’re buying a Mercedes product. You’ll go to a Mercedes dealer for parts. You’ll deal with Mercedes service costs.
If you’re looking at a new Smart #1 or #3, you’re buying a global tech product. In many markets, these are sold through a completely different agency model. The tech is lightyears ahead of the old cars, but the "German-ness" is diluted.
The bottom line on ownership
The transition of Smart from a Swiss watchmaker's dream to a German-Chinese powerhouse tells the story of the modern auto industry. It’s about survival through collaboration.
Mercedes-Benz provides the prestige.
Geely provides the execution.
Without Geely, the Smart brand likely would have been shuttered entirely by 2022. Instead, it's being reborn as an all-electric SUV brand that actually makes sense on a balance sheet.
Actionable steps for Smart owners and buyers
- Check your VIN: If your Smart car was built before 2022, it’s a pure Mercedes-era vehicle. Parts are still widely available through the Mercedes-Benz network, though some smaller dealerships are phasing out specialized Smart service bays.
- Service nuances: If you own an older electric Smart (the ED or EQ models), be aware that the battery tech is proprietary to the Mercedes era. Third-party repairs are notoriously difficult for these specific high-voltage systems.
- The New Era: If you're in Europe or Asia eyeing the new #1 or #3, don't expect a tiny car. These are full-sized compact SUVs. They compete with the Hyundai Ioniq 5 and the Tesla Model Y, not the Mini Cooper.
- Software Updates: New Smart vehicles (the JV era) support Over-the-Air (OTA) updates. This is a massive departure from the old cars which required a physical "Star Diagnosis" tool at a dealership for almost any software tweak.
The brand isn't what it used to be. It’s bigger, faster, and more Chinese than German. Whether that’s a good thing depends on if you value the "park anywhere" utility of the past or the "drive 250 miles on a charge" reality of the present.