NEW YORK – Sliding sales continue at Smart USA, despite the mini comeback the auto industry is staging so far this year.

But Jill Lajdziak, president of the U.S. sales arm, is optimistic about Smart’s future, despite the steep downward plunge in volume. “This brand is all about sustainability,” she says.

“Smart can grow beyond the micro segment,” Lajdziak tells Ward's at a press preview here of the new Smart EV that will debut in October. “The health of this brand requires bringing up new variants.”

That decision already has been set in motion. Daimler AG, owner of Smart Car, said in April when announcing a new tie-up with the Renault SA-Nissan Motor Co. Ltd. Alliance that the next Smart and Renault Twingo will be built on a common platform, developed together, in 2-door and 4-door variants.

“We could bring out a little larger vehicle with good fuel economy,” Lajdziak hints here, while admitting, “we’ve got to get to profitability by growing volume.”

Smart USA never has met its sales targets. It fell far short of its 30,000-units goal for the first year of distribution in the U.S., and demand has seen a steady decline since.

U.S. sales this year plunged 62.8% through May, Ward’s data shows. Only 2,772 Smart Fortwo units were sold in the period, compared with 7,451 in like-2009. Worldwide deliveries in the first four months (including the U.S.) hit 41,200 units, a spokeswoman for Daimler in New York says.

Despite falling demand, the brand still has 77 dealers in the U.S., whose fixed gross is up so far this year. That’s because customers return to the dealerships for service. Smart USA also has increased its distribution network, adding new stores in Puerto Rico and Hawaii.

Nationwide, the current average transaction price for a Smart Fortwo is $14,500, bouncing back from a drop in 2009. Ladjziak says the coupe accounts for 80% of sales and the cabriolet picks up the remainder.

Showroom traffic is not where it needs to be at this point, she admits. But Smart is launching some new “intercept” marketing initiatives.

One such pilot project recently debuted in Detroit, where a street team was able to draw a number of leads. Smart also is employing a road-show trailer that pulls into congested urban sites to attract consumers.

“I did the street-team stuff myself in order to interact with consumers,” says Lajdziak, who became president of the brand at the beginning of the year. Formerly, she led General Motors Co.’s Saturn brand.

Last year, she was retained by Roger Penske, president of the Penske Automotive Group (PAG), to help finalize Saturn’s purchase from GM. That deal eventually imploded just before the signing deadline, when Renault reneged on a deal to supply Saturn cars after Penske’s pending contract with GM expired in two years.

Penske was so impressed with Ladjziak’s work on the project he hired her to run Smart USA, which is a wholly owned subsidiary of PAG. Penske is chairman and CEO of the company, the second-largest chain of retail dealerships in the U.S.

Smart USA is the exclusive importer of the micro car produced by Daimler in France. Less than half of the Smart sales network consists of Mercedes-Benz dealers and only a small fraction of the PAG outlets have a Smart franchise.

However, PAG owns a flagship Smart franchise in Bloomfield Hills, MI, where Ladjziak oversees day-to-day operations. She took command of the dealership to test retail techniques she perfected while running Saturn.

Ladjziak says she hopes to eventually incorporate many of the sales practices Saturn was noted for as it became an icon for customer service in the auto industry.

In the last three months, the Bloomfield Hills outlet has been one of the top-3 Smart stores in the nation. At present, Smart offers no incentives on ’10 models. But there is a $169 monthly lease available on ’09 cars, as well as 1.9% interest rate on purchases.

Ladjziak says Smart hopes to offer more fuel-efficient models in the future, but there won't be a diesel available in the U.S. for some time. “We can’t bring the current diesel we offer in Europe here,” she says. “Down the road, a diesel is something we should consider.”