After dropping 38% in volume, last year, new Smart boss Jill Lajdziak sees opportunities for a turnaround.
Smart’s new U.S. boss says she’s confident the brand can turn itself around after suffering a devastating sales decline of nearly 40% in 2009. And it won’t take the addition of a second model, insisted Jill Lajdziak, though the subsidiary of Germany’s Daimler AG is reportedly looking at such an alternative.
In her first public comments since replacing former Smart President Dave Schembri, earlier this month, Lajdziak acknowledged that the company has faced some serious problems over the last 12 months that won’t be easy to resolve.
During 2008, Smart sold 24,622 copies of its pint-sized fortwo, a figure that plunged 38% in 2009. Lajdziak discounted concerns that the 2-seater is suffering from product design problems, countering that the situation facing the company was “very different” in 2009 from the year before, when it staged a much-delayed entry into the U.S. market.
For one thing, fuel prices plunged, while the American economy collapsed, noted Lajdziak, the former head of the Saturn division, which General Motors decided to close after emerging from its bankruptcy. Lajdziak tried to sell Saturn to Roger Penske, the Detroit-based entrepreneur who is distributing Smart, in the U.S., for Daimler. While the sale fell through, Penske decided to bring Lajdziak onboard to replace Schembri.
“You have to get people behind the wheel to change their perceptions” about Smart, Lajdziak suggested. Barely eight feet long, nose-to-tail, it is significantly smaller than even the subcompact models Americans have grown used to.
That appeals to tech-oriented buyers, she said, but may be a harder sell to mainstream motorists. So, added Lajdziak, she is trying to take the fortwo to potential customers. She has been stopping at malls and coffee shops to talk to prospects and plans to initiate similar, if more formal marketing campaigns around the country.
But some critics believe that Smart is due to upgrade and expand its line-up. And senior Daimler officials seem to agree. Earlier this week, the German maker’s CEO, Dieter Zetsche, effectively confirmed that it is talking to French competitor Renault about developing a larger, 4-seat Smart car. A study underway should be completed shortly.
While Lajdziak acknowledged, “there are many things to consider,” she declined to discuss the Renault project.
But Smart will expand its line-up a bit, shortly, with the addition of a battery-powered fortwo, dubbed Smart Electric Drive. The version will yield about 85 miles on a charge.
“There’s a lot of interest in electric,” said the new Smart executive, adding that the company is also giving thought to bringing over a diesel version of the fortwo, though no firm plans are yet in place.