Too good to survive? Ford's Fiesta had no hope in electric age

Road Cars

Ford's decision to axe its bestselling, highly acclaimed Fiesta was inevitable, in the face of rising costs, changing tastes and electric legislation writes Andrew Frankel

2022 Ford Fiesta

The final version of Ford's bestselling Fiesta

Ford

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You will have no doubt seen or heard the news that Ford is to stop production of the Fiesta next summer and may have picked up that the S-Max and Galaxy are due for the chop sooner even than that. But did you know that even the Focus has had its death sentence written in indelible ink, and it’s only lasting longer than the aforementioned because its current product cycle doesn’t end until 2025? But then that will be that.

There will be no small number of you looking at this and concluding that Ford must have gone mad. Perhaps you can argue the toss over the MPVs, but canning Ford’s two most popular cars of the century to date? Why on earth would it choose to do that?

There are reasons which I’ll get into, but whether they’re good or not is what I really want to start with.

The first and most important point to make is that there is a distinction between cars that are popular, and those that are profitable. Indeed it is quite often the case that the very reason that makes them so popular is what also threatens their profitability.

I’ll explain. There is a very good case to make, and off-the-record some Ford insiders will make it, that the Fiesta was actually too good, because the amount of investment required to get it that way ate into the already tiny profit margins that always accompany high volume, low price mass market offerings. It was better than it needed to be and therefore more expensive to make. But in such a competitive market it’s a cost you simply cannot pass on to the consumer.

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For a very long time that didn’t matter very much because the sales volumes were so high even a small amount of profit on a very large number of cars made sense. But in 2019, the last pre-Covid full year of sales, Ford shifted around 365,000 Fiestas, which may sound a lot, until you compare it to the 625,000 it sold ten years previously. Today the Fiesta makes so little money, Ford generates more profit licensing Lego. Literally.

What has the Fiesta done so wrong to account for such a calamitous drop off in sales? Absolutely nothing. It remains the finest car of its kind, and by a distance. All that’s happened is that the sector in which it resides, like those that include the Focus, S-Max and Galaxy, has been shrinking at an alarming rate, because people who buy new cars today want to be seen in a crossover SUV.

In addition, Ford has a very particular problem with the Fiesta insofar as it needs the Cologne factory in which it’s built for the electric vehicles it will produce in a joint venture with Volkswagen. So faced with canning a cheap old car whose technology is already doomed or an expensive new one powered by the fuel of the future, what would you do?

But the truth is that Ford has also been running down production of the Fiesta in recent times not simply because there’s little or no money in it, but also because the shortage of computer chips means that Ford has decided to allocate its limited supply to cars that return the most profit, and in that regard it’s very little different to any other manufacturer in the world. So if you’re wondering where your base-spec Skoda had got to while your wealthy neighbours got their brand new Bentley in a few weeks, that probably has more than a little to do with it.

Lego Ford rally car

Lego is more lucrative than the Fiesta with its wafer-thin profit margins

The sad truth is that the Fiesta’s days were always likely to be numbered, even without the chip crisis, the factory dilemma, the shrinking sector and so on, because it’s hard indeed to see a place for any small, affordable car in the future, unless intended for purely urban or local use. Because as we all know the sales of petrol powered cars is not far from being banned in many parts of the world, our own included, with hybrids outlawed not long after that. And as things stand, it’s simply not possible even to engineer a small, all purpose car like a Fiesta with a decent electric range, let alone get it to market at a price a new Fiesta buyer is able to pay.

And even Fiestas aren’t cheap any more, the range starting at £18,655, though that does buy you a model with a mild hybrid drive attached. But what about the electric opposition? Well there’s an electric Corsa, but Vauxhall wants over £31,000 for it, and while its claimed range in 217 miles, if it’s cold, or dark, your journey is hilly or on the motorway or any combination of the above, I’ll bet your nerve won’t last much past 150 miles. A Fiat 500e is similar: over £30,000 to buy, under 200 miles of official (and therefore unrealisable) range. Or you could go complete mad and spend twice as much as Ford wants for the Fiesta on a Honda e and be doing well to scrape more than 110 miles from a charge.

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Batteries are big and batteries are expensive, the two things a small, affordable car cannot be. But electric they will soon have to be, so what’s going to happen then?

It’s a very good question. The prices of electric cars at the moment are absolutely bananas and as the world lurches from crisis to crisis, we are likely to become ever less able to afford them. So people won’t. They will instead cling to their fun, compact, economical Fiestas like a drowning man to a rubber ring. In fact it’s already happening. People were keen to blame the rocketing prices of second-hand cars on chip shortages and doubtless that played a part, but not so great a part as people wondering what the hell they’re going to buy instead. So they don’t bother.

One final thought. What about all those people who scraped enough together to buy an elderly Fiesta as a first car, fell in love with it and became a loyal Ford customer as a result? They won’t be doing that in Pumas because they’re too expensive and they’re too new. ‘Get ‘em in on the ground floor,’ as the old industry mantra used to go. Problem is the ground floor now is all-electric.

And while the cult of the SUV still has some distance to run, I am more sure than ever that it will end, because ultimately these cars that are needlessly high, bluff and un-aerodynamic and inefficient will have to give way to machines that are smaller, and friendlier to the planet. But it will be a while, and require an advance in battery technology sufficient for small cars to have a decent range and an affordable price. So don’t hold your breath or, if you have one, sell your Fiesta.