The 65-mpg car Ford won't sell in US
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The 65-mpg car Ford won't sell in US
no surprises on the logic of 'why', but I thought I'd share and see what you guys have to say about it anyhow.
source: http://articles.moneycentral.msn.com...ell-in-us.aspx
& now, a pic
The Fiesta ECOnetic could compete with hybrids and help remake Ford's image. But big obstacles are keeping the vehicle out of the US market.
By BusinessWeek
If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system and gets a whopping 65 miles to the gallon. Oh, yes, and the car is made by Ford Motor (F, news, msgs), known widely for lumbering gas hogs.
Ford's 2009 Fiesta ECOnetic goes on sale in November. But here's the catch: Despite the car's potential to transform Ford's image and help it compete with Toyota Motor (TM, news, msgs) and Honda Motor (HMC, news, msgs) in its home market, the company will sell the little fuel sipper only in Europe.
"We know it's an awesome vehicle," says Ford America President Mark Fields. "But there are business reasons why we can't sell it in the U.S." The main one: The Fiesta ECOnetic runs on diesel.
Automakers such as Volkswagen and Mercedes-Benz have predicted for years that a technology called "clean diesel" would overcome many Americans' antipathy toward a fuel still often thought of as the smelly stuff that powers tractor-trailers.
Diesel vehicles now hitting the market with pollution-fighting technology are as clean as, or even cleaner than, gasoline-powered cars, and they are at least 30% more fuel-efficient.
Yet while half of all cars sold in Europe last year ran on diesel, the U.S. market remains relatively unfriendly to the fuel.
Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline. Add to this the success of the Toyota Prius, and you can see why only 3% of cars in the U.S. use diesel.
"Americans see hybrids as the darling," says Global Insight auto analyst Philip Gott, "and diesel as old tech."
None of this is stopping European and Japanese automakers, which are betting they can jump-start the U.S. market with new diesel models. Mercedes-Benz by next year will have three cars it markets as BlueTec. Even Nissan Motor (NSANY, news, msgs) and Honda, which long opposed building diesel cars in Europe, plan to introduce them in the United States in 2010.
But Ford, whose Fiesta ECOnetic compares favorably with European diesels, can't make a business case for bringing the car to the United States.
First of all, the engines are built in Britain, so labor costs are high. Plus the pound remains stronger than the greenback. At prevailing exchange rates, the Fiesta ECOnetic would sell for about $25,700 in the United States.
By contrast, the Prius typically goes for about $24,000.
A $1,300 tax deduction available to buyers of new diesel cars could bring the price of the Fiesta to around $24,400. But Ford doesn't believe it could charge enough to make money on an imported ECOnetic.
Ford plans to make a gas-powered version of the Fiesta in Mexico for the United States. So why not manufacture diesel engines there, too?
Building a plant would cost at least $350 million at a time when Ford has been burning through more than $1 billion a month in cash reserves. Besides, the automaker would have to produce at least 350,000 engines a year to make such a venture profitable.
"We just don't think North and South America would buy that many diesel cars," Fields says.
The question, of course, is whether the U.S. will ever embrace diesel fuel and allow automakers to achieve sufficient scale to make money on such vehicles.
California certified VW and Mercedes diesel cars earlier this year, after a four-year ban. James N. Hall, of auto researcher 293 Analysts, says that bellwether state and the Northeast remain "hostile to diesel."
But the risk to Ford is that the fuel could take off, leaving the carmaker to play catch-up -- despite having a serious diesel contender in its arsenal.
This article was reported and written by David Kiley for BusinessWeek.
By BusinessWeek
If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system and gets a whopping 65 miles to the gallon. Oh, yes, and the car is made by Ford Motor (F, news, msgs), known widely for lumbering gas hogs.
Ford's 2009 Fiesta ECOnetic goes on sale in November. But here's the catch: Despite the car's potential to transform Ford's image and help it compete with Toyota Motor (TM, news, msgs) and Honda Motor (HMC, news, msgs) in its home market, the company will sell the little fuel sipper only in Europe.
"We know it's an awesome vehicle," says Ford America President Mark Fields. "But there are business reasons why we can't sell it in the U.S." The main one: The Fiesta ECOnetic runs on diesel.
Automakers such as Volkswagen and Mercedes-Benz have predicted for years that a technology called "clean diesel" would overcome many Americans' antipathy toward a fuel still often thought of as the smelly stuff that powers tractor-trailers.
Diesel vehicles now hitting the market with pollution-fighting technology are as clean as, or even cleaner than, gasoline-powered cars, and they are at least 30% more fuel-efficient.
Yet while half of all cars sold in Europe last year ran on diesel, the U.S. market remains relatively unfriendly to the fuel.
Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline. Add to this the success of the Toyota Prius, and you can see why only 3% of cars in the U.S. use diesel.
"Americans see hybrids as the darling," says Global Insight auto analyst Philip Gott, "and diesel as old tech."
None of this is stopping European and Japanese automakers, which are betting they can jump-start the U.S. market with new diesel models. Mercedes-Benz by next year will have three cars it markets as BlueTec. Even Nissan Motor (NSANY, news, msgs) and Honda, which long opposed building diesel cars in Europe, plan to introduce them in the United States in 2010.
But Ford, whose Fiesta ECOnetic compares favorably with European diesels, can't make a business case for bringing the car to the United States.
First of all, the engines are built in Britain, so labor costs are high. Plus the pound remains stronger than the greenback. At prevailing exchange rates, the Fiesta ECOnetic would sell for about $25,700 in the United States.
By contrast, the Prius typically goes for about $24,000.
A $1,300 tax deduction available to buyers of new diesel cars could bring the price of the Fiesta to around $24,400. But Ford doesn't believe it could charge enough to make money on an imported ECOnetic.
Ford plans to make a gas-powered version of the Fiesta in Mexico for the United States. So why not manufacture diesel engines there, too?
Building a plant would cost at least $350 million at a time when Ford has been burning through more than $1 billion a month in cash reserves. Besides, the automaker would have to produce at least 350,000 engines a year to make such a venture profitable.
"We just don't think North and South America would buy that many diesel cars," Fields says.
The question, of course, is whether the U.S. will ever embrace diesel fuel and allow automakers to achieve sufficient scale to make money on such vehicles.
California certified VW and Mercedes diesel cars earlier this year, after a four-year ban. James N. Hall, of auto researcher 293 Analysts, says that bellwether state and the Northeast remain "hostile to diesel."
But the risk to Ford is that the fuel could take off, leaving the carmaker to play catch-up -- despite having a serious diesel contender in its arsenal.
This article was reported and written by David Kiley for BusinessWeek.
& now, a pic
#3
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IMHO, $25,700 is way too steep for a subcompact baseline vehicle comparable to a Yaris hatchback. To recuperate that kind of cost delta, you would need the car to be durable (Ford!!!) and last quite a while in relation to say a real Yaris that gets around 40mpg and costs 1/2 the price.
#4
IMHO, $25,700 is way too steep for a subcompact baseline vehicle comparable to a Yaris hatchback. To recuperate that kind of cost delta, you would need the car to be durable (Ford!!!) and last quite a while in relation to say a real Yaris that gets around 40mpg and costs 1/2 the price.
Ford have a very good reputation for reliablity in Europe and are generally not very far off the Japanese models.
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Just because it's a subcompact doesn't mean it's a "baseline" model like the Yaris is designed to be. So a comparison shouldn't be made. As everyone knows, in Europe small cars are often "premium" in design as they don't associate "big" with "upper class" like Americans do. The Fiesta is designed as a $20-$26K car. The Yaris is designed as a $12-$15K car.
I wish Americans would finally embrace small cars as great cars and not as the old "penalty box" mentality that people see them as. Or as cars that only "kids" buy or as that "first car". It's really pathetic.
See what Europe gets in a subcompact, it's anything but "cheap".....
I wish Americans would finally embrace small cars as great cars and not as the old "penalty box" mentality that people see them as. Or as cars that only "kids" buy or as that "first car". It's really pathetic.
See what Europe gets in a subcompact, it's anything but "cheap".....
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Ok, now in direct response to why Ford "can't" bring the Fiesta ECOnetic to the US.
It does bother me a lot as I would like the US automakers to start competing and have some success in it's own home market. It's so sad that they have so many obstacles in building competition in their home country where the Japanese dominate.
I know it's not Ford's fault that Americans won't open up their eyes to NEW clean diesel technology. But I must blame Ford for building all their best cars overseas for Europe (diesel or not). Ford, GM, and Chrysler have ignored a market that the Japanese do so well in America selling in. They still think that small cars don't (and didn't) sell when Toyota and Honda has always sold millions of compacts and subcompacts right here in the US.
The Fiesta should have been built right from the start in the US by Americans.
It should have been designed to be price competitive in the US. Plain and simple. Ford shot themselves in the foot by building this car overseas and now can't figure out how to bring it home affordably. Pretty sad.
Anyway, it does look like a regular Fiesta will come to the US as a gas powered cheapened Mexican built version. If Ford can get 35-40 mpg out of it, they'll have a seller.
It does bother me a lot as I would like the US automakers to start competing and have some success in it's own home market. It's so sad that they have so many obstacles in building competition in their home country where the Japanese dominate.
I know it's not Ford's fault that Americans won't open up their eyes to NEW clean diesel technology. But I must blame Ford for building all their best cars overseas for Europe (diesel or not). Ford, GM, and Chrysler have ignored a market that the Japanese do so well in America selling in. They still think that small cars don't (and didn't) sell when Toyota and Honda has always sold millions of compacts and subcompacts right here in the US.
The Fiesta should have been built right from the start in the US by Americans.
It should have been designed to be price competitive in the US. Plain and simple. Ford shot themselves in the foot by building this car overseas and now can't figure out how to bring it home affordably. Pretty sad.
Anyway, it does look like a regular Fiesta will come to the US as a gas powered cheapened Mexican built version. If Ford can get 35-40 mpg out of it, they'll have a seller.
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#9
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wow that's a really good looking little car. and it's diesel too! unlike most americans, i love anything diesel powered. i find it hard to understand why people don't like diesel here yet. i think it's a lack of education on how nice a modern diesel can be.
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The fundamentals of the American market are just so different from Europe needs and desires.
Look at how many cars Volkswagen sells in North America...The Jetta is their biggest seller, a car that doesn't sell in Europe (Golf/Rabbit is much preferred) Where driving dynamics, oveall refinement, and low fuel consumption are all greatly valued there, Americans care more about overall size (look at how large the Camry and Accord have become). VW hasn't had much success here with their German imports - cars which trump the Japanese and domestic in overall refinement and driving dynamics, but also cost thousands more.
But the waitlists of the new Jetta TDI have me at least seeing a glimmer of hope. Nobody seems to realize that that 5-passenger 05 Passat TDI got 50mpg too, and is an actual car (sorry prius).
Look at how many cars Volkswagen sells in North America...The Jetta is their biggest seller, a car that doesn't sell in Europe (Golf/Rabbit is much preferred) Where driving dynamics, oveall refinement, and low fuel consumption are all greatly valued there, Americans care more about overall size (look at how large the Camry and Accord have become). VW hasn't had much success here with their German imports - cars which trump the Japanese and domestic in overall refinement and driving dynamics, but also cost thousands more.
But the waitlists of the new Jetta TDI have me at least seeing a glimmer of hope. Nobody seems to realize that that 5-passenger 05 Passat TDI got 50mpg too, and is an actual car (sorry prius).
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Americans really need to let this idiotic bigger is better mentality go.
Some traditional reasons though...
- American roads are the most open and spacious
- Gas, for much of US history, had been cheap (this one's off the list now)
- Americans haul a lot of crap
- Americans are bigger
- Big is usually associated with class (it's why a Mercedes S-Class isn't small)
- Americans (women especially) associate big size with good safety
Some traditional reasons though...
- American roads are the most open and spacious
- Gas, for much of US history, had been cheap (this one's off the list now)
- Americans haul a lot of crap
- Americans are bigger
- Big is usually associated with class (it's why a Mercedes S-Class isn't small)
- Americans (women especially) associate big size with good safety
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