The DaimlerChrysler subsidiary sold 50,500 ForTwos and 9,100 Roadsters in the first seven months of this year.
In spring Smart boss Andreas Renschler predicted that Smart would exceed last year's sales figures of 104,600 ForTwos and 20,100 Roadsters.
Smart dealers blame the ForTwo's age for slow sales - it is seven years since the innovative two-seater was introduced - and the high incentives offered by rival automakers such as Renault for their small cars.
Some Smart dealers complain that the company is not offering an attractive financial package to prospective buyers.
They say the low demand for the Roadster is because customers are reluctant to buy a fun car like the Roadster in Germany's current poor economic climate.
Sales of Smart cars grew by 17.9 percent to 75,900 units during the first seven months of this year, compared with the same period last year. Sales were boosted by the introduction of the ForFour model in April.
More than 16,000 ForFours have been sold since its launch. Analysts expect that the 2004 unit sales target of 50,000 ForFours will be reached.
However, if sales continue at the same level, the number of Smart cars sold by the end of this year will be around 18,000 units below target.
"Looking at the current situation it might become difficult for Smart to sell more than 170,000 vehicles as planned," said Georg Stuerzer, DaimlerChrysler analyst at the HypoVereinsbank.
But Smart has no plans for marketing campaigns to boost its slow-selling models.
Sales boss Philipp Schiemer said: "We know that we have to try harder, but we are positive that we will reach our annual unit sales target."