This year finally saw the return of the Fiesta nameplate to the Ford American model line-up—a vehicle that had a short run in the early ‘80s. The debut of the Fiesta this year was one of the most anticipated and most promoted by Ford probably in the history of the company. Between all of the Fiesta tours, bloggers, advertising on high profile shows like American Idol and an image lift from rally racing star Kent Block the Fiesta got a lot of pre-debut media coverage. However, a recent USA Today article calls into question whether subcompact cars like the Fiesta will actually see success in the American market. Here is our take:
The 2011 Ford Fiesta has been on sale now for a few months and so far in the market it is sting in the fourth-best-seller spot for the subcompact segment. Ahead of the Fiesta is the Hyundai Accent, Honda Fit and the class leader Nissan Versa. In fact, the Versa was named the least expensive new car with its low entry-level price—that is if you can live with almost no creature comforts. So how many units put the Fiesta in fourth place in the segment? 3,473 units. If that sounds low, it is when you compare it to the 8,066 units the all-new 2011 Chevrolet Cruze sold in its fist full month in the compact car market.
What does this all mean? Basically, cars in the subcompact car segment saw a hike when gas rose to $4 a gallon a couple of years ago. At the time, people were dumping their SUVs for smaller cars and people looking for new cars were considering more efficient and potentially smaller cars. In fact, there was a time where you couldn’t even get your hands on a Toyota Prius Hybrid. Now there are lots full of them and subcompact cars like the Ford Fiesta, Toyota Yaris, Honda Fit and Nissan Versa. This is mostly attributable to the cost of fuel and the fact that the majority of America isn’t packed in so tight that small cars are a necessity just to get around. That means the major factor that drives the small car sales is price—price of fuel and the car itself. Low price of gas equals lower subcompact sales; where as, high price of gas equals higher subcompact sales.
Bottom line—the Fiesta is doing better than some might have predicted, but the real question is what will happen with the state of fuel prices. That is what will really change the subcompact market.
[Source: USA Today]