For those who believe good things come to those who wait, Ford Motor Co. finally, belatedly, took the wraps off the American version of its Fiesta subcompact at this month’s L.A. Auto Show.
The annual event underscored what one industry executive described as “the right-sizing” of the American market, as U.S. motorists begin to switch from big, gas-guzzling trucks to smaller, more fuel-stingy passenger cars and crossover vehicles.
For Ford and its U.S. rivals General Motors and Chrysler, that increasingly means making more use of platforms originally developed for the European market.
Ford has long survived on truck offerings such as the full-sized F-Series pickup and Explorer sport-utility vehicle and has devoted only limited attention to the small end of the market. IN part that is because in the past it would cost as much as $1 billion to add a small car like the Fiesta to the line-up, while profits from such a model were unlikely.
So Ford and its cross-town rivals generally have avoided the small car segment or have introduced products developed on the cheap. Those stripped-down econoboxes have, for the most part, failed to generate much demand, allowing Japanese and Korean entries to dominate the market.
“We’re trying to change the mind-set with this car,” said Moray Callum, chief designer for Ford’s North American automotive operations. With Fiesta, he said, Ford is moving away from the classic U.S. econocar, instead offering a competitively priced sedan/hatchback combo delivering a surprising level of content and decidedly up-market design.
To pull that off, said Ford President Mark Fields, "We really (had) to bring the global strengths we have as a company."
In the case of Fiesta, that meant starting out with a small car platform developed by longtime Japanese affiliate Mazda Motor Co., and shared with the Mazda2 subcompact.
That platform underwent significant engineering and design modifications in Europe before its launch on the Continent nearly two years ago. Even more tweaking was needed to meet U.S. safety and emissions standards, including a revised interior and American-style bumpers.
But according to Ford’s global product development chief, Derrick Kuzak, close to 80 percent of the Fiesta, by value, is shared on both sides of the Atlantic. “And that means big savings from improved economies of scale," he said.
Ultimately, Ford hopes to sell more than 600,000 Fiestas worldwide and have 1 million vehicles sharing the same platform, Kuzak said. The savings are so significant they allow the automaker to offer additional features, such as stability control and seven airbags, that would normally have been left off the Fiesta sold in the U.S., where subcompacts carry a much lower price tag than in Europe.
Fiesta is just the beginning of what Ford CEO Alan Mulally has dubbed “One Ford.”
It wasn’t the first European-based product to make a trans-Atlantic migration. That title officially belongs to the Transit Connect van, which went on sale earlier this year.
Nor will Fiesta be the last. The next version of the U.S. Ford Focus will be all but identical to the European model, with subtle changes required for regulatory reasons.
And there’s much more to come, with other models, such as the C-Max “people mover” on tap for the near future.
“By 2012, 80 percent of our products will be based off global platforms," said Ford President Fields. Of course, that’s the proverbial two-way street, as North America will work on models for sale abroad, as well.
Ford's approach to its globalized future is changing because the automaker has sold off a controlling stake in Mazda. By law it can no longer integrate the two companies’ product planning. Mazda will still be working with Ford, said the Japanese maker’s CEO Takashi Yamanouchi, but there will be a greater degree of independence.
“We’ll still share a lot, but in practice, we’ll be more focused on Europe” as a key center of engineering design and excellence, “than on Mazda, in the future,” concurred Ford’s Fields.
Of course, Ford is not the only U.S. automaker going global in its product development strategy. A major reason why the planned sale of Opel to a Canadian-Russian consortium fell through is that parent General Motors felt the European subsidiary would no longer be able to work as a global center of design and engineering.
Opel has been developing a growing number of passenger cars and crossovers for GM North America, including the underlying platform for the latest Chevrolet Malibu, which was named North American Car of the Year in 2008.
Then there’s Chrysler, whose financial struggles have cost it much of its product development capabilities. New parent Fiat intends to make up for that by sharing platforms. CEO Sergio Marchionne announced last month that half of Chrysler’s products, by mid-decade, would be derived from Fiat along with 40 percent of its powertrains.
But as with Ford, things will flow both ways. Going forward, Chrysler will become the global development center for advanced electric propulsion technology for the trans-Atlantic partnership.