According to a report from Germany, the city car brand is looking for a Chinese partner, and its future rests on whether one can be found.
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A report from Handelsblatt states Daimler, owner of the Mercedes-Benz and Smart marques, will decide the fate of the city car brand by the end of the year.

The decisive moves will take place from May onwards, when Ola Kallenius, currently Daimler's head of research and development, takes over from Dieter Zetsche.

While Zetsche has proven to be a keen and patient supporter of Smart, it looks possible Kallenius could pull the plug.

The German newspaper says Katrin Adt, Smart's CEO, is trying to save the brand by finding a suitable partner in China. The two most prominent options are BAIC, Daimler's current local production partner, and Geely, which bought a strategic 9.7 per cent stake in the German autoamker in 2018.

If a Chinese alliance can be forged, production of the brand will likely shift to the Middle Kingdom. The future of the brand's current factory in Hambach, France, looks to be safe though, as Daimler has already committed to making electric Mercedes-Benz vehicles there.

Originally the brain child of Nicolas Hayek, CEO of watch company Swatch, Smart began making its first cars in 1997.

Sales over the years, like the cars themselves, have been small, and the operating margins are extremely tight at best.

As Daimler doesn't break out its figures, it's hard to gauge how much money the automaker has sunk into Smart over the years, but industry analyst Evercore ISI (via Automotive News) estimates the marque loses between €500 million and €700 million ($800 million to $1.1 billion) per year.

According to Car Sales Base, the brand sold 97,346 cars across Europe in 2018. The marque hit its peak in 2004 when it shifted 134,814 new vehicles, while its nadir was 2014 when it managed just 55,877 sales.

The brand has never hit its initial target of 200,000 sales per year.

To help the brand make larger vehicles, Smart has entered partnerships with Mitsubishi and Renault. The former arrangement gave the world the Mitsubishi Colt and the first-generation ForFour.

The current Smart ForFour and Renault Twingo share a factory, and a rear-wheel drive platform. Renault has indicated it will leave the partnership when the Twingo reaches the end of its lifecycle.

In 2018, Smart said it will become a fully electric brand from 2020. The brand left the Australian marketplace in 2015.