Electric Drive, Renault Engines, CVT All Part Of Smart Five-Year Outlook

Business isn’t exactly strong for Smart in the U.S.

The niche minicar brand sold 24,000 vehicles in 2008, then just 14,000 units last year.

The reason for the decline, insists Smart USA president Jill Lajdziak, isn't so much that demand for the smart has been exhausted, or that the smart has lost any of what she calls “the cool factor” (it's surprisingly timeless, in a geeky, gawky sort of way), but that the economy has taken its toll. Shoppers were looking at the smart as a discretionary purchase—a second, third, or fourth vehicle for the family—and now they've instead deferred their purchase.

Lajdziak says that the fortwo is “not a lifestyle product,” but concedes that it meets certain lifestyle needs. Pointing to other discretionary vehicles, she said sales were down 58 percent in the roadster segment.

The company, Lajdziak says, is “laserlike in our efforts to improve the business.” Two years after the U.S. launch of the Fortwo—and three, perhaps four years before the launch of the completely new and long-awaited replacement, Smart is in the middle of a rethink.

Step one will be expanding the dealership network. Smart just opened its first dealership in Hawaii and has about 77 stores currently.

The other part of the expansion is the possibility of recasting the Fortwo as an electric model. Arriving this October, the Smart Electric Drive is still a testbed, with only 1,500 cars to be sold globally through 2011. But for model-year 2013 the Electric Drive will become a mass-production reality. Whether that means another 10,000 or 12,000 vehicles, or whether smart decides to build 100,000 of these vehicles remains to be seen, said Derek Kaufman, Smart’s VP of development, and depends on the kind of reception it gets from the public.

In a first drive of the Smart Electric Drive, we pronounced it more enjoyable to drive than the standard gasoline Smart Fortwo.

Minicar realities aside (and Smart is good at dispelling those with incredible space efficiency), the Smart’s powertrain—including its unpredictable, sometimes harsh-shifting automated manual transmission—have been the cause of many complaints. Kaufman said that a lot of the issue was with the term “automated manual.” As soon as smart insisted that dealerships use the term “manual transmission that is self-shifting,” the number of complaints and negative comments significantly dropped.

Regardless, Kaufman hinted, the brand will reap the benefits of the recently announced partnership between Daimler and Renault-Nissan—meaning that we'll likely see a version of a Renault or Nissan minicar engine in the next-gen Smart, along with a Nissan-provided CVT.

The next-generation Smart Fortwo, arriving possibly as soon as 2013, will also likely benefit from Renault-Nissan’s huge investment in battery technology and production.