SAN FRANCISCO – With a tremendous amount of momentum on its side, Ford is preparing to launch a Fiesta subcompact this summer that completes a successful overhaul of the automaker’s car lineup and aims to steal back the hearts of young buyers, many of whom drive Asian models.
“Fiesta really gives us an opportunity to go directly after the Japanese,” said Frank Davis, Ford’s executive director of product development. “Small cars have been the stronghold for them … This is an opportunity for us to pick up some share.”
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Davis said the Fiesta, the No. 1 selling car in Europe, offers better performance, fuel economy and features than other cars its size. It also has a stylish European flair and comes in bold, sporty colors, with optional body panel graphics.
The Fiesta joins a Ford car lineup that has been revamped in recent years and has been gaining popularity because of its good looks, technology and fuel efficiency. The line now includes the Focus compact car, Fusion midsize car and Taurus large car.
Through March, Ford’s U.S. sales have increased 36.7% but its car sales are up even more, 46.2%, and Ford has been aggressive at keeping the models fresh.
Ford hasn’t sold a subcompact car in the U.S. since 1997 when the budget econobox called Aspire was discontinued. But the Fiesta, expected to get about 40 m.p.g. in highway driving, could hit the market at just the right time this summer, as gas prices begin their seasonal rise.
Evelyn Orellana, 26, of South San Francisco, drives a Honda Fit but said she was drawn to the Fiesta’s funky colors, such as juicy lime and bright magenta, and said she “would definitely consider one.”
But some analysts say subcompact has a relatively big price
Ford plans to market its Fiesta subcompact as a better value than those made by its Asian rivals — but some analysts say the car, which is the automaker’s most important product launch this year, has a relatively high price.
“My concern about the car is that it is priced too high for the Ford nameplate,” said Jim Hall, managing director of 2953 Analytics in Birmingham. “A fully loaded Fiesta costs more than a fully loaded Focus right now.”
When the Fiesta goes on sale early this summer, the base price will be $13,320 for the four-door sedan and $15,120 for the hatchback, excluding destination charges.
That’s competitive with $12,615 for the Toyota Yaris and $14,900 for the Honda Fit, but higher than the $9,990 for the Nissan Versa.
Ford brand manager Sam De La Garza said the Fiesta is a better value because of standard features such as floor mats, a capless fuel system and a driver’s side knee air bag.
“Most competitors don’t even have floor mats that are standard,” De La Garza said, and some don’t offer a rear defroster or a stereo.
Ford executives also said the Fiesta has better fuel economy, performance and is quieter than its competitors. Ford expects the Fiesta will get 40 m.p.g. on the highway and 30 m.p.g. in the city — higher than the 2010 Yaris, Fit and Versa.
Still, with options such as an automatic transmission, leather seats and a moon roof, the Fiesta’s price quickly exceeds $19,000 — above the starting price for Ford’s slightly larger Focus, which starts at $16,290.
Chantel Lenard, Ford’s group marketing manager for small and medium-size cars, said Ford’s research shows Americans have become more willing to pay for small cars offering better performance and amenities. Nearly 25% of small-car buyers have an annual income of $100,000 or more, Lenard said.
“Given the fuel shock we had a couple of years ago, when fuel prices went towards $5 and also with the recession, we have seen a shift,” Lenard said.
Ford won’t say how many Fiestas it hopes to sell annually in the U.S., but George Peterson, president of automotive research and consulting firm AutoPacific, said Ford could sell up to 70,000 — matching Fit and Yaris annual sales.
“This car is a little bit pricey, but it has an excellent presence and driving dynamics,” Peterson said. “I think this is the best of the subcompact cars.”
The Fiesta, the No. 1 selling car in Europe, also is a test of Ford’s plan to build essentially the same car from the same platform around the globe.
By 2014, Ford is expecting global sales of about 1.6 million vehicles annually from several vehicles built on the Fiesta platform built at several plants around the globe. The Fiesta also is the first car under Ford President and CEO Alan Mulally to be built from a similar platform around the world.
For North America, Ford is building the Fiesta in Cuautitlan, Mexico.
By building cars on a global platform, Ford expects to save millions in development, engineering and material costs that will help the automaker complete a multiyear turnaround plan.
That plan is starting to deliver profits after $30 billion in losses between 2005 and 2008. On Tuesday, Ford is expected to report a first-quarter profit of nearly $1 billion, excluding special charges.
“Fiesta is where we are really seeing as the first delivery of this new vision,” Fiesta chief engineer Steve Pintar said.
On April 8, Ford said it would build a next-generation version of the Ford EcoSport small SUV in Brazil using the Fiesta platform and plans to export it to other regions of the world. Ford also said it eventually plans to develop five separate vehicles from the Fiesta platform.
A two-door hatchback like a version sold in Europe could be built elsewhere, and a Fiesta with a direct-injected turbocharged EcoBoost engine also is possible, Pintar said.
The next car due from a global platform is an all-new version Ford Focus, which is to go on sale in the U.S. by early next year. By 2012, Ford expects to sell more than 2 million vehicles annually from 10 different vehicles it will produce from the Focus platform.
“Fiesta, Focus, Fusion and then Taurus is a real nice continuum of products,” Pintar said, and it gives customers “a series of compelling reasons to come and cross shop us.”