Check to see if your antenna mast has been replaced by one of the aftermarket "shorty" masts. The shorty ones do cut signal to the radio even though many people swear by them. They are ok for local stations but not much more. The Smart has a built in antenna amplifier that does boost the signal.
The factory radio on my 2011 had great reception but I opted to go with an aftermarket Andriod based radio that could do everything a tablet or Smart phone could do. I opted for the Atoto brand of android radio, I bought the Mark IV but I believe they have just came out with a newer model.
If you do go aftermarket be sure to buy an installation kit that has the wiring adapter because the Smart wiring to the radio is a nightmare to try to pin out to a non Smart radio. Since the Fortwo does not have an Accesory position on the switch some mods are in order to play it so you don't have to leave the switch in the "On" position to play the radio when the vehicle isn't running.
Some electric Fortwo drivers have commented on the AM radio being really bad especially at low speed when the electric "noisemaker" is operating at low speed. DCO