With more complex regulations fast approaching and the electrification of the industry taking off, automakers will face some very tough decisions over the next few years. They must decide whether to keep current models or ditch familiar faces to focus on more efficient electric cars.
That’s probably Ford Europe’s predicament when it comes to the future of the Fiesta, its superstar seller in the region for decades. The small car has been on the market for over 40 years, during which time it has become a staple of the European market, selling over 16 million units over its long life.
A party with the party
The Fiesta has evolved over the years into more attractive and competitive generations. As such, it was able to survive many crises while outperforming strong competitors such as the Volkswagen Polo, Renault Clio or Fiat Punto. When the European car market lost ground from 2011 to 2013, many B-segment cars went out of production. This was the case with the Fiat Punto, a long-time leader that never got a fourth generation due to shrinking B-segment sales in Europe.
So, is it possible that the Fiesta suffers the same fate as the defunct Punto? From this side, the prospects for segment B in Europe are not good. In fact, over the past eight years, it has lost more than 5 points in market share, and the slide hasn’t stopped. The main reason is the arrival and popularity of small SUVs, and Ford is certainly no exception to this trend.
In 2014, Ford introduced the EcoSport in Europe and, although it did not initially meet its sales targets, it managed to reposition this B-SUV and gain a fair share of the segment. In 2017, the EcoSport registered 63,000 units registered in Europe compared to 255,000 for the Fiesta. A year later, Ford sold 113,000 SUV units and 271,000 sedan units. In 2019 there were 229,000 Fiestas and 123,000 EcoSports, and by then the brand had introduced another one B-SUV, the Puma.
In 2020, the pandemic and the Puma dented the popularity of the Fiesta. Its volume fell 32% to just 156,000 units. Last year there were 82,000 registered units of the sedan compared to 134,000 for the Puma. The segment share of the former fell from 6.8% in 2020 to just 3.9% in 2021, while the crossover percentage fell from 6.4 to 6.6%.
A family feud?
Today, the Fiesta plays a minor role in the B-segment. According to JATO, in the first half of this year, its registrations continued to drop by 49%. This is considerably more compared to the segment’s total decline, which is down 19%. In June, the Fiesta, a car that has been in the top 10 of European sales for many years, was overtaken by nine other competitors and was in 58th position overall.
The current Fiesta has been around since the beginning of 2017. It is five years old and should therefore exist in its current format for another two or three years. However, it is unclear whether Ford will keep this iconic car in production as a traditional small sedan or not. We already know the three-door sedan is dead, and Ford recently announced that it’s no longer accepting orders for the Fiesta lineup. The automaker could likely prioritize an electrified crossover version and reposition the model to utilize the SUV boom.
Whatever decision Blue Oval executives make, the truth is that the European B-segment is set to experience further turbulence in the years to come. The legislation makes cars more expensive to produce at a time when consumers only want SUVs. And this is happening just as Chinese automakers are gearing up to release their most competitive cars to global markets.
The author of the article, Felipe Munoz, is automotive industry specialist JATO Dynamics.
