Fiesta sales plummeted 35.9% in March, but the negative result stands out against Ford’s overall sales in the month, which rose 1.3% to 219,717 units based on 28 daily selling days compared with 27 year-ago.

However, a closer look shows last month actually was good for the Fiesta, which delivered 6,502 units, one of its strongest showings since May 2011 when 7,120 units were sold.

Launched in June 2010, the Fiesta was slow out of the gate, with only 1,028 deliveries in its first month, according to WardsAuto data. Sales peaked in April 2011 at 9,787 units and until now gradually have declined.

The Fiesta in February held a 14.0% share of the Lower Small segment as defined by WardsAuto, behind the first-place Toyota Yaris with a 25.9% share but ahead of other competitors, including the Mazda2 and Kia Rio.

Still, the Fiesta’s severe year-over-year decline raises eyebrows today during a Ford conference call to discuss March sales with analysts and journalists. Its March performance was somewhat softened by the success of the Focus, which saw sales surge 58.8% to 28,293 units, the C-car’s best March tally ever.

Erich Merkle, Ford’s U.S. sales analyst, is quick to defend the Fiesta. “When you look at the mix of compacts and subcompacts, we’re very consistent with the industry,” he says. “We’ve got our best small-car share in 10 years.”

Critics argue there is not enough price differentiation between the Fiesta, which starts at $13,200, and the entry-level Focus that begins at $16,500. Merkle dismisses the argument, noting consumers typically cross-shop the Fiesta with the Fusion midsize sedan and Explorer SUV, as well.

Ford says last month was its best March performance in the past five years, with retail deliveries climbing in nearly every segment: Cars were up 10%, utilities up 11% and trucks up 12%.

The Focus was Ford’s best-selling car for the month, but the Fusion wasn’t far behind albeit nearly flat with year-ago, up 0.25% to 27,134 units for an all-time sales record. Other standouts in the car segment include the Taurus fullsize sedan, up 15.3% compared with year-ago to 7,123, and the Mustang, up 1.9% to 9,046.

The Escape cross/utility vehicle led the utility segment on a volume basis with 20,411 deliveries, despite a 13.6% dip from prior-year. The Edge CUV enjoyed the best performance on a percentage basis, with sales up 9.4% to 14,058.

In the truck segment, the F-Series saw its best March since 2007, up 5.6% to 54,894 units. Ken Czubay, Ford vice president-U.S. marketing, says 41% of F-150 retail customers last month chose the 3.5L direct-injection turbocharged EcoBoost V-6 engine. “Pickup buyers want fuel economy but can’t sacrifice performance.”

Consumer demand for fuel-efficient vehicles was reflected in the showing of Ford’s less-efficient vehicles. The Club Wagon van and Expedition fullsize SUV saw sales plummet 32.4% and 20.0%, respectively.

Ford ended March with 480,000 vehicles in inventory including 145,000 cars, 190,000 trucks and 145,000 utilities. That number was a slight improvement on the 412,000 units of inventory at the close of like-2011.

With industry observers predicting an increase in U.S. light-vehicle sales this year, Merkle says Ford is taking steps to ramp up production. The auto maker is adding a second shift employing 1,800 workers at its Louisville, KY, assembly plant in the first quarter and a third shift employing 1,300 workers in the year’s second half.

The auto maker also will add a second shift at its Kansas City, MO, facility in May and a third shift at its Michigan assembly plant sometime in the year’s first half.

“We definitely have plans to expand production this year,” Merkle says without revealing total volume increases.