The Smart brand will no longer sell cars in the United States and Canada after the 2019 model year.
The cause is shrinking demand for minicars coupled with the high cost of homologating future models for local sale.
Smart sales totaled 1,276 units in the U.S. in 2018, down from a high of 24,622 units a decade ago, and the sole model currently on sale, an electric version of the Fortwo, is registering less than 100 units per month.
Existing owners shouldn't worry as access to service and replacement parts will still be available via authorized Mercedes-Benz dealerships, Smart spokeswoman Catherine Gebhardt said in a statement released on Monday.
Parent company Daimler hasn't managed to turn Smart into a profitable brand in the two decades since the first-generation Fortwo was launched. There was a risk the brand might be dissolved altogether but in March a deal was struck with Daimler's main shareholder, Geely, which will see Smart live on outside the U.S.
The plan is to establish a 50:50 joint venture in China that will be responsible for the manufacturing and marketing of Smart cars. A new, expanded lineup of Smart cars will start launching from 2022, with the cars to be offered exclusively with battery-electric powertrains.