Ford To Build Small Fiestas in Mexico: Hatchback Coming

Ford will build its sub-compact Fiesta hitting the U.S. market in 2010 in Mexico. This wasn’t a big surprise, because making a small car expected to be priced $15K and under couldn’t possibly be made in Europe or Asia given the unucertainty of how long the U.S. greenback will stay weak. The only possibilities were Canada, U.S. and Mexico, and costs are cheapest in Mexico. The plant, in Cuautitlan, Mexico, is getting a $3 billion investment to make the Fiesta.

For that kind of money, it is clear that Ford is serious about making more than one vehicle in the B-segment, and making small cars profitable. Though Ford had previously said it was only planning a sedan version of the Fiesta, the plans now definitely call for a hatchback. A third configuration is likely, though not by 2010. “We have to look at more vehicle configurations off the smaller platform,” Ford CEO Alan Mulally said recently.

Ford did away with the hatchback and wagon versions of the Ford Focus when it restyled the car for the 2008 model year. The sedan and coupe versions of the last Focus, to my surprise, accounted for around 80% of the sales volume. So the other three vehicles—three-door hatch, five-door hatch and wagon—were only about 20%. Ford nixed those designs to reduce complexity and increase profit.

Mulally officially said today: “Ford is absolutely committed to leveraging our global assets to accelerate the shift to more fuel-efficient small cars and powertrain technologies that people really want and value,” Ford CEO Alan Mulally said in a statement.

“Really want.” With gas prices North of $4.00 and possibly headed for $6.00 (and probably not going much below $4.00 for a long time if ever)consumers are going to demand innovative and utilitarian designs that get good gas mileage. The Fiestas could get 35 mpg or better. The share of pickups and big SUVs are headed down down down in the next decade.

The Mexican plant, which now makes F-Series pickups for the Latin American market, will be converted to make the Fiesta. Who would have thought that would happen five years ago?

Ford said it expects its annual capacity in Mexico to increase to 500,000 vehicles and 330,000 transmissions by 2012. Ford’s current capacity there is about 296,000 vehicles.

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