Smart’s Expansion Strategy Faces Roadblocks in China as Larger Models Struggle to Gain Traction
Shanghai, China – Geely’s Smart brand is encountering challenges in the competitive Chinese automotive market as its strategy to expand beyond compact city cars with larger models fails to resonate with consumers. Despite a confident push into larger vehicle sizes, sales data reveals a preference for Smart’s smaller offerings, leading to inventory buildup and price reductions, particularly for the flagship Smart #5 model.
Sales Data Highlights Preference for Compact Models
According to data from the China Association of Automobile Manufacturers (CAAM) and the Passenger Car Association, Smart delivered 29,986 new vehicles in China between March 2025 and February 2026. The Smart #1, the brand’s smallest and longest-available model, accounted for approximately 64% of total sales. In contrast, the larger #3 and #5 models represented only 14% and 22% of sales, respectively. Car News China reports that the underperformance of the larger models has led to dealers liquidating unsold inventory through used car channels at significant discounts.
Smart #5 Faces Steep Discounts
The Smart #5, positioned as the brand’s flagship model in 2025, has particularly struggled to gain market acceptance. Reports indicate that brand-new, unregistered Smart #5 vehicles are being sold through used car platforms in Chongqing at prices 100,000 yuan (approximately $14,500 USD) below the official recommended retail price. A platform employee quoted by Yuan Auto stated that the long-range luxury versions of the #5, originally priced at 269,900 yuan ($39,100 USD), are now available for as little as 169,800 yuan ($24,600 USD). Further discounts are being offered for trade-ins or financing options.
Continued Investment in Larger Models Despite Sales Trends
Despite the challenges faced by the #5, Smart is continuing to invest in larger vehicle models. The company is preparing to launch the Smart #6, which, according to regulatory documents, will be nearly 5 meters long with a 2,926 mm wheelbase – making it the longest vehicle in the Smart lineup. This commitment to larger models suggests Smart remains confident in its expansion strategy, even as current sales data indicates a stronger consumer preference for its compact offerings.
CAAM’s Role in the Chinese Automotive Industry
The China Association of Automobile Manufacturers (CAAM) plays a significant role in the Chinese automotive industry, providing policy research and data. CAAM is regulated by China’s State-owned Assets Supervision and Administration Commission of the State Council and is one of the associations selected by the Chinese government for national economic policy making.