Chinese automotive group Geely Holding has acquired a 50 percent stake in the Smart brand from Daimler, with the two firms confirming the deal in a joint statement.

Described as a “50:50 globally focused joint venture”, the two companies say they will own, operate and “further develop” the Smart brand together.

Under the agreement, the next generation of Smart electric vehicles will be assembled at a new purpose-built electric car factory in China, with global sales scheduled to begin in 2022.

Interestingly, though, the new vehicles will be styled by Mercedes-Benz with engineering coming from Geely. The statement furthermore revealed the Smart product portfolio would expand into the B-segment.

The board of directors of the new Smart joint venture will comprise six executives with equal representation from both parties.

“For more than 2.2 million customers, Smart represents a pioneer in urban mobility. Based on this success story, we look forward to further enhancing the brand with Geely Holding, a strong partner in the electric vehicle segment,” said Dieter Zetsche, chairman of the board of management at Daimler and head of Mercedes-Benz Cars.

“We will jointly design and develop the next generation of Smart electric cars that combine high-quality production and known safety standards for sale both in China and globally. In the future, we are looking forward to working with all partners to sustain our success in China and worldwide."

Li Shufu, Geely Holding chairman, added his company “fully respected” the value of Smart.

“This brand has a unique appeal and strong commercial value. Geely Holding and Daimler look forward to this challenging and exciting new project, through which we will further push the introduction of premium electric products to give a better mobility experience to our customers,” said Shufu.

“As equal partners, we are dedicated to promoting the smart brand globally; we will leverage our experience and global competencies in brand management, R&D, manufacturing, supply chain management and other areas. The synergies from this co-operation will lead to mutual benefits, at the same time we will further develop technologies for Smart including connectivity, to continue to lead in the industry as it undergoes a wider transformation.”

The news comes after earlier rumours suggested Daimler would either completely phase out the Smart brand or form a partnership with a strong Chinese company.