It is understood the company has contacted around eight agencies to pitch for the business. MBA, which has held the advertising account since Smart launched in the UK in 2000, will repitch for the business.
MBA will continue to hold the business for Mercedes-Benz's after-sales service, trucks, vans, corporate and used cars.
The media planning and buying account, which is handled by DaimlerChrysler's agency BJK&E, will not be affected by the review.
The DaimlerChrysler head of marketing, Sam Bridger, who joined from the mobile operator Orange last year, is overseeing the pitch process.
The review comes as the company plans to launch the Smart ForFour, its first four-seater vehicle, next year.
Springer & Jacoby handles the Smart car business in all markets except the UK and also holds DaimlerChrysler's corporate account.
Campbell Doyle Dye holds the above-the-line creative account for the DaimlerChrysler Mercedes-Benz new car range.
Smart, which began as a joint venture between DaimlerChrysler and the Swiss watchmaker Swatch, became wholly owned by the car manufacturer in 1998, when the compact city cars were first put on sale.