Fiesta Gets Tough Competition in its Own Showroom as Small-Car Sales Plod
By Bill Visnic August 17, 2010Gasoline prices are staying low and consumers aren't exactly flocking to hybrids and other fuel-saving small cars.
That might be part of the reason sales for Ford Motor Co.'s much-anticipated Fiesta subcompact haven't exactly gone orbital; for July, the Fiesta's first full month on the market, sales were 3,349.
Ford knew the Fiesta will have to overcome Americans' historic aversion to small cars. It's been tried by many makers many times before. But the job is all the more difficult when Ford's own much-larger and still reasonably economical Fusion midsizer - a car two classes above the Fiesta - in on sale in the same showroom for similar, or even less money.
A recent dealer ad showed a well-equipped Fiesta selling for $200 more than a Fusion after stacking up all the possible incentives on the larger car. Even if a buyer didn't qualify for all the Fusion come-ons, the quandary still is obvious.
What downsizing?
With the double-whammy of low gasoline prices and a struggling economy that likely is disproportionately affecting buyers in the entry-level market segments, "small" and fuel-efficiency continues to be a tough sell. Without the push of high fuel prices, few buyers appear to be lusting to downsize in a downstrable fashion or pay high premiums for fuel efficiency.
Toyota's Prius hybrid was off 29.2 percent in July and year-to-date sales are up just 7 percent compared with a weak 2009. The company's Yaris subcompact, a direct Fiesta competitor, is down more than 40 percent year-to-date.
At Honda, the Fit subcompact slid 22.8 percent through July, to 29,781 sales, while the once-promising Insight hybrid is bumping along at an average monthly sales pace of less than 2,000 units; through July, the Insight had managed just 12,115 sales.
Even Hyundai Motor America, a company that seems to be selling everything it makes, isn't immune to the small-car malaise. Its Accent is off 24 percent year-to-date.
And sales of the smart brand subcompact cars are practically off the charts, with just 560 sold in July, a 61-percent dropoff.
Some makers are finding buyers for subcompacts. Nissan Motor Co. Ltd.'s Versa is up 54 percent year-to-date. And although comparisons to 2009 should be tempered because the company had spent part of the year in bankruptcy, General Motors Co.'s Chevrolet Aveo sales have improved 46.7 percent to 24,715 through July.
2010 Prius photo by Toyota
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As much as the environmentalists and the political left may want Americans to drive small, fuel efficient cars, its a tough tough sell. For $18K, a potential Fiesta buyer has to look at the much larger $20K Sonata that gets 35MPG on the highway (much less in the city than the Fiesta, but a lot of weight is given to highway driving in this country).
A good article and very interesting about the price differential between the Fiesta and Fusion. I would expect the Fusion at the next model upgrade to move upmarket to make room for the Fiesta (and new more expensive Euro Focus). I would also expect over time the Fiesta to be cheaper with dealers giving more of their profit away - you are comparing a brand new car against a 5 year old Fusion (albeit one heavily revised 18 months ago).
When fuel prices increase, as they will then you will see people move to the Fiesta/Focus classes.
Well Fusion has alot more room and probably has a nicer ride than the Fiesta so no comparison there!
What Nissan was in bankruptcy this year? I never heard of that. Must be an error in this article about Nissan declaring bankruptcy. I think Edmunds meant to move the bankruptcy issue onto the next sentence that had to do with the Chevy Cruze(ala GM's bankruptcy.)
If the 2012 Focus is priced between the Fiesta and Fusion-- as it probably will be-- then the Fiesta will have an even tougher time in the US market. It seems that Ford will need to raise Fusion pricing, as guy1974 pointed out. Right now the Fusion is priced thousands less than some of the competition, including the Malibu, so Ford has some wiggle room.
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