Ford Fiesta Off to Strong Start in Europe; High Hopes for China

Ford Motor Co.’s all-new Fiesta B-car is making waves in markets where it already has been introduced, despite the worse global economic downturn in decades.

The Fiesta is the first vehicle to emerge from CEO Alan Mulally’s “One-Ford” concept, which is focused on leveraging the auto maker’s global resources. The auto maker says it has sold a total 110,000 units of the car in the markets where it is available.

Production for Europe began last August at Ford’s Cologne, Germany, assembly plant, and export models are on sale in South Africa, Australia and New Zealand.

Ford’s Changan Ford Mazda Automobile Co. Ltd. joint venture began output of the Fiesta in early January in Nanjing, China, followed by the auto maker’s Valencia, Spain, facility later in the month. Plans call for other global assembly sites to come online through 2010.

Ford already has delivered more than 89,000 units in the 19 European countries where the car is available, helping bolster its regional market share 0.5% in January to 8.3%, the auto maker’s highest penetration since 2004.

Ford’s share rose again in February in 17 of the 19 markets, with only Greece and Spain posting slight decreases. The Fiesta currently is the second best-selling car in Europe behind the Volkswagen Golf and is the top-seller in the U.K.

Ford’s new Fiesta helping boost global sales.

Since its introduction, the Fiesta has racked up numerous accolades, including being named “Car of the Year” by the U.K.’s What Car? magazine and “Scottish Car of the Year 2008” by the Association of Scottish Motoring Writers.

Hopes are high for the Fiesta in China, which surpassed the U.S. in January to become the world’s largest auto market. Changan Ford Mazda is the first of the Fiesta production sites to build both the 5-door hatchback and 4-door sedan. Other facilities are manufacturing 3- and 5-door versions of the car.

Prior to launch, Ford says it received thousands of pre-orders in China. “Launching the new Fiesta in China as the first market in Asia indicates the significance of China in Ford’s global strategy,” says John Parker, executive vice president-Asia Pacific and Africa.

Ford expects the Fiesta to benefit from a stimulus plan recently launched by the Chinese government that cuts taxes from 10% to 5% on vehicles with a displacement of 1.6L and below. Chinese Fiestas are equipped with either a 1.3L or 1.5L engine.

The tax cut, which took effect in January, already is proving beneficial, with China vehicle sales rising 25% in February, the first gain in four months. The China Association of Automobile Manufacturers reports February deliveries climbed to 827,600 units, bringing the tally for the year’s first two months to 1.56 million vehicles.

Although Changan Ford Mazda sales dropped 6% in February to 204,334 units, compared with year-ago, “the Fiesta is being launched at the right time as the small-car segment has tremendous potential in China with the government’s boosting measures,” says Jeffrey Shen, president and CEO of Changan Ford Mazda.

Ford will begin building the Fiesta for North America next year at its Cuautitlan, Mexico, plant, where construction of the stamping facility and the retooling of the assembly plant is under way.

Fiesta production also will be added next year at AutoAlliance Thailand Co. Ltd., another Ford/Mazda JV.

Meanwhile, reports out of Europe say Ford is scrapping plans to offer a high-performance Fiesta ST, which was to debut sometime this year.

A company source tells the U.K.’s Autocar online magazine Ford has decided it’s not the right time for the performance version. It still could be added to the Fiesta lineup, but not “until 2012 at the earliest.”

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