Core Insights - Smart's sales have been declining for two consecutive years, with a projected 2024 sales volume of 33,400 units, representing a nearly 20% decrease from 2023 [4] - The launch of the "Year of the Horse" edition of the EQ fortwo did not generate the expected consumer interest, with significant inventory remaining unsold [5][12] - Smart's strategy to expand its model lineup has not resonated with the market, as evidenced by the low sales figures for its new models [8][9] Sales Performance - Smart's sales volume for 2024 is expected to drop to 33,400 units, with a further decline to 30,800 units in 2025 [4] - The EQ fortwo "Year of the Horse" edition saw only 20 units sold in January at a specific dealership, with 1,000 units still in inventory as of February 11 [5] - The EQ fortwo accounted for 67.7% of Smart's total sales in 2025, with projected sales of 20,800 units [4] Market Position and Strategy - Smart, a joint venture between Mercedes-Benz and Geely, has struggled to maintain its unique brand identity in the high-end small car market [9] - The brand's transition from fuel vehicles to electric models has not provided a competitive edge, as its technology is based on Geely's architecture [9] - Smart plans to launch two new models, the EQ fortwo and EQ6, in 2026 to better balance mainstream market presence and brand identity [12][13] Competitive Landscape - The electric vehicle market is becoming increasingly competitive, with brands like NIO's Firefly achieving significant sales success [11][12] - Firefly's pricing strategy and brand trust have contributed to its rapid growth, contrasting with Smart's struggles [12] - The overall market for electric vehicles saw a decline in sales, with January 2023 figures showing a drop of 18.9% year-on-year [13]

Core Viewpoint - Smart is struggling in the Chinese market despite leveraging Mercedes-Benz design and Geely technology, leading to a significant reduction in sales targets for 2023 [2][5][20] Group 1: Sales Performance - Smart has faced disappointing sales for its models, particularly the EQ3 and EQ5, prompting a downward revision of its sales target by over 40% mid-year [2][5] - The sales figures for Smart's electric vehicles show a stark contrast, with the smallest model, EQ1, selling 2,071 units in July, while the EQ3 and EQ5 sold only 380 and 263 units respectively [3][5] - The EQ5, launched as a mid-size SUV, has only reached a peak monthly sales of 1,091 units since its release, with most months seeing sales between 200 and 300 units [4] Group 2: Product Strategy - Smart is shifting its strategy by introducing a plug-in hybrid version of the EQ5, which is seen as a necessary corrective measure due to challenges faced by its pure electric strategy [3][9] - The design of the EQ5 targets young urban consumers seeking a fun and stylish vehicle, but it has not resonated with the intended audience, leading to a mismatch in market expectations [10][12] - The upcoming EQ6 is expected to be the model with the highest "Mercedes" influence, indicating a strategic pivot to regain market competitiveness [19][20] Group 3: Market Positioning - Smart's transition from a compact car brand to a player in the mainstream passenger vehicle market has been met with challenges, particularly in adapting to the fast-paced Chinese EV market [3][14] - The brand's positioning as a high-end player in the EV market is complicated by the competitive landscape, where rivals are rapidly iterating their products [20] - Smart's reliance on a complex cross-border collaboration model has hindered its ability to respond quickly to market changes, impacting its overall agility [14][20] Group 4: Brand and Marketing Efforts - Smart is undertaking brand-building initiatives, including the introduction of BRABUS versions of its vehicles to elevate brand perception, although this is seen as a short-term fix rather than a comprehensive solution [15][17] - The addition of the Mercedes star logo on the Smart vehicles sold in China is part of a strategy to enhance brand recognition in the local market [17]