Will It Survive In Europe?

With more complex regulations now around the corner and the electrification of the industry taking off, automakers will be faced with some very difficult decisions in the next few years. They need to decide whether to keep the current model or leave a familiar face to focus on more efficient electric cars.

This may be Ford Europe’s predicament with regards to the future of the Fiesta, its superstar seller in the region for decades. The small car has been on the market for more than 40 years, during which it became a staple for the European market, selling over 16 million units throughout its long life.

Party Together Party

The Fiesta has evolved over the years into a more exciting and competitive generation. Thus, it was able to survive many crises while beating strong competitors like the Volkswagen Polo, Renault Clio, or Fiat Punto. When the European car market lost ground from 2011 to 2013, many B-segment cars ended production. This is the case of Fiat Punto, the longtime leader who never got a fourth generation due to the contraction of B-segment sales in Europe.

So is it possible that the Fiesta could suffer the same fate as the dead Punto? On that front, the prospects for segment B in Europe are not good. In fact, in the past eight years, it has lost more than 5 points of market share, and the decline has not stopped. The main reason lies in the arrival and popularity of small SUVs, and Ford certainly did not escape this trend.

In 2014, Ford introduced the EcoSport in Europe and, despite initially not meeting its sales targets, Ford managed to reposition this B-SUV and get its fair share of the segment. In 2017, EcoSport registered 63,000 registered units in Europe compared to 255,000 for the Fiesta. A year later, Ford sold 113,000 SUVs and 271,000 hatchbacks. In 2019, there were 229,000 Fiestas and 123,000 EcoSports, and by that time, the brand had introduced other B-SUV, Puma.

In 2020, the pandemic and Puma ruined the Fiesta’s popularity. Volume fell 32 percent to just 156,000 units. Last year, there were 82,000 registered hatchbacks versus 134,000 for the Puma. The share of the former segment fell from 6.8 percent in 2020 to only 3.9 percent in 2021, while the percentage of crossovers increased from 6.4 to 6.6 percent.

Family Feud?

Today, the Fiesta plays a small role in segment B. According to JATO, in the first half of this year, registrations continued to decline by 49%. That’s much more than the total segment decline, which fell 19 percent. In June, the Fiesta, a car that has been in Europe’s top ten sellers for years, was overtaken by nine other competitors and took 58th place in the overall standings.

The current Fiesta has been around since the beginning of 2017. It is five years old and is therefore expected to remain in its current format for another two or three years. However, it remains unclear whether Ford will keep this iconic car in production as a traditional small sedan or not. We already know that the three-door hatchback is dead, and Ford recently announced it’s no longer taking orders for the Fiesta lineup. The automaker could likely prioritize an electric crossover version and reposition the model to take advantage of the SUV boom.

Whatever decision the Blue Oval executives make, the reality is that Europe’s B segment is expected to experience further turmoil in the years to come. The law made cars more expensive to produce at a time when consumers only wanted SUVs. And it comes as Chinese manufacturers prepare to bring their most competitive cars to the global market.

The author of the article, Felipe Munoz, is JATO dynamics Automotive Industry Specialist.