Business Week, June 9, 2009


The Car That Could Save Ford

At last, Ford is bringing its stylish, well-designed, fuel-efficient, and successful Fiesta to America. It's about time

The Good: Snappy exterior design and dash doesn't say econo-box

The Bad: Lacks a few features, like a sliding rear seat, to keep costs down

The Bottom Line: Handsome, fuel-efficient, and makes a statement at a low price

Reader Reviews

Up Front

It's hard to believe that a small car, smaller even than a Ford Focus and a car whose backseat should come with a bottle of olive oil to lubricate occupants' legs, could be key to Ford's (F) comeback in the U.S. But it's true.

The Ford Fiesta, which will be launched into dealerships in Spring 2010 as a 2011 model, is the first of a series of so-called world cars-the same car sold on every continent. It's a risky move by Ford, as the automaker has been down this road before and hit nothing but axle-breaking potholes.

Recall the mid-1990s Ford Contour/Mercury Mystique, which was the same as the European Mondeo? It sold O.K. in Europe but was viewed as a rental car at best stateside. And the original Ford Focus? That car was praised for nimble handling but fell into disrepute when Ford botched the manufacturing launches on multiple continents, and glitches and recalls followed.

The Fiesta is a big step in the right direction for Ford, despite the car's small package. Already a big hit in Europe and Australia and catching on in China, the car, which will be offered in both hatchback and sedan versions in the U.S., looks better than the comparatively bland offerings from Chevrolet (Aveo), Toyota (Yaris), Scion (xA), Nissan (Versa), and Hyundai (Accent).

When viewed in profile, the car appears to be up on its haunches, thanks to a strong character crease that slopes down from the rear of the car to the front. The hatchback, which is the popular model style in Europe and the one lent to me by Ford, is carved at the rear to more resemble a small SUV than a traditional hatch like, say, the Volkswagen (VOWG) Golf/Rabbit.

The design, which Ford Europe design chief Martin Smith calls "kinetic," turned heads in Ann Arbor, Mich., a town used to seeing future vehicles running around since four Asian automakers have research and design centers here. The mother of one of my son's schoolmates gushed, "Wow, that is sharp," as she looked back with disdain at her Chrysler minivan.

Looks are important. But the real question facing Ford is what the future of small cars is in the U.S. given the unpredictable fluctuations of gas prices. Last summer, when gas was at $4.50 per gallon and above in many parts of the country, not only were Toyota (TM) Prius hybrids flying off dealer lots, but so were Ford Focuses, Honda (HMC) Civics and Fits, and even Chevy Cobalts. For the last six months, though, after gas prices tumbled, small cars have been piling up on dealer lots like beach toys after Labor Day.
But Ford is betting the Fiesta will transcend the normal market for small cars. It's counting that aggressive styling combined with what Ford hopes are head-of-the-class quality ratings will draw not only more 20-32-year-olds who have historically traded out of Ford for Honda, but also baby boomers and empty nesters downsizing their lives and lowering their living costs after seeing retirement accounts vaporize in the recession.

Behind the Wheel

Small cars demand small, efficient engines-and Ford has one. The 1.6-liter, 118-horse power engine and European-tuned suspension will come with either an automatic or five-speed manual transmission. That's enough to go 0-60 in 9.9 seconds. Perfectly adequate unless you are Speed Racer. Fuel economy for the small power-plant is not set yet. Some Web sites have speculated that combined miles per gallon for the Fiesta will be 35 or 36 when the U.S. Environmental Protection Agency runs it through its paces. At that level, which would include 40 mpg or better on highway, Fiesta would beat all comers in the category, including the Honda Fit. Ford is after bragging rights.

Colors aren't set yet, but the Euro version I had was a muted green called, for some reason, "Squeeze." The 118-hp engine may not inspire speed-loving, steak-eating Americans, but the taut suspension and the smooth manual shifter made driving around town and some back roads fun. Steering response and turning radius into parking spaces was quite good, perhaps even better than the Honda, which is pricier.

If rear-seat passengers over 5'7" are squeezed, the driver and front seat occupant do just fine. Well-constructed leather seats offer support. Room up front is abundant in every direction. The dash and instrument panel, an homage to cell-phone keypads, is logical, though I did spend 15 to 20 minutes sorting out all the functions. No big deal. Ford's SYNC system, which allows hands-free phoning, texting, and iPod control, as well as traffic info and other services, is an option that most connectivity-addicted drivers will want. And that will help Ford make a profit on such a small car, something it hasn't been able to do in the U.S. lately.

If I had one niggle, it is that some of the plastic surfaces found in the Euro version and expected to carry over to the U.S. seem a bit cheap, especially in the lower half of the car inside the cabin. But that's hardly a deal breaker. Space behind the rear seat was big enough for three to four grocery bags. Naturally, the rear seats fold down, which, combined with the hatch, makes the Fiesta as versatile as any of its rivals.

Pricing hasn't been announced yet, but Ford executives say the bracket should be between $12,000 and $16,000.

Buy It or Bag It?

Ford thinks it's on to something with this small car and is trying to build anticipation for its arrival. It has selected 100 people to drive the Euro version of the Fiesta to gauge acceptance and figure out if it needs any tweaking before it's unleashed on the broader public. People who are driving can be followed on Twitter, Facebook, and

Normally, a car company wouldn't be so public for a whole year before the car goes on sale. But Ford is hoping that the success of the car abroad translates to interest and fashion appeal in America.

Classy-looking and well-packaged for a small, inexpensive car. And it could well be the top fuel sipper in the category. From a Detroit automaker. And the critics said it couldn't be done. Welcome to America Fiesta.

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