With a more complex regulation right around the corner and the electrification of the industry taking off, the car makers are expected to make very tough decisions in the coming years. They need to decide whether to keep their current models or cancel some for the sake of more efficient electric cars.
This is probably the situation for Ford Europe regarding the future of the Fiesta, its super-seller for years. This subcompact or supermini hatchback has been in the market for more than 40 years and has become one of the leading small cars in Europe and other regions where it has been produced or exported. In total, Ford has sold more than 16 million units of the Fiesta.
As the Fiesta evolved into more appealing and competitive generations, it was able to survive big crisis and even outsell strong competitors like the Volkswagen Polo, Renault Clio or Fiat Punto. When the European car market dropped in 2011-2013, many of the B-Hatches were discontinued. This was the case of the Fiat Punto, a long-standing leader that never got a fourth generation due to the shrinking sales of the B segment in Europe.
So, how is it possible that the Fiesta could have the same fate of the late Fiat Punto? Well, the perspectives for the B segment in Europe are quite bad. Over the last 8 years, the segment has lost more than 5 points of market share and doesn't seem to be stopping. The main reason is the arrival and popularity of the small SUVs, and Ford is not exempt from this trend.
In 2014, Ford introduced the Ecosport in Europe and although initially it did not meet the sales targets, it managed to reposition this B-SUV and gain a decent part of this segment. In 2017, the Ecosport registered 63,000 units in Europe against 255,000 units of the Fiesta. One year later, Ford registered 113,000 units of the SUV and 271,000 units of the hatchback. By 2019, there were 229,000 Fiestas and 123,000 Ecosports, and the brand had introduced another B-SUV, the Puma.
In 2020, the pandemic and the popular Puma hit the popularity of the Fiesta. Its volume dropped by 32% to just 156,000 units. Last year, there were 82,000 units registered of the hatchback and 134,000 units of the Puma. The Fiesta's segment share fell from 6.8% in 2020 to 3.9% in 2021; the Puma’s share increased from 6.4% to 6.6%.
It is clear that the Puma became the major threat to the Fiesta.
Today the Fiesta plays a minor role within the B segment. According to JATO, during the first half of this year, its registrations continued to plummet (-49%), even more than the total segment (-19%). By June, the Fiesta, a car that was in the European top 10 for many years, was outsold by 9 other competitors, and occupied the 58th position in the overall ranking.
The current Fiesta has been around since early 2017. At 5 years old, it is expected to survive for two or three more years. However, it is not clear whether Ford will keep this iconic car as the traditional small hatchback or not. They could probably give priority to an electrified crossover version and reposition the model to make use of the SUV boom.
Whatever they decide, the truth is that the European B-Segment is expected to live even more difficult times in the coming years. The new regulations is making them more expensive to produce at a time when the consumers just want SUVs, and when the Chinese makers are getting ready to bring their more competitive cars to the global markets.
The author of the article, Felipe Munoz, is an Automotive Industry Specialist at JATO Dynamics.