A Fiesta for Ford

In predicting the success of a new small car, an experienced oddsmaker would take the following into account: European roads are already jammed with minicars of a dozen different makes, sales of small foreign cars in the U.S. are slipping, and sales of U.S.-made subcompacts are declining steadily, while the rest of the auto industry enjoys a boom. So to put it mildly, the decision by Ford Motor Co. to drive into the transatlantic market with the smallest car it has ever made, the Fiesta, is a big gamble. The car is already in production in several European plants. Although it will not be exported to the U.S. until 1977, it will be launched officially in Europe in September--on the 19th anniversary of the debut of the ill-fated Edsel, which eventually cost Ford losses estimated at $350 million.

If the Fiesta is a bust, the red ink will be much deeper. The car has already cost Ford $800 million. "By the time we're through," predicts one senior Ford executive, "there won't be much change left out of a billion." Five years in the making, the Fiesta came close to being scrapped a few years ago when the energy crisis crippled the European car market. But Chairman Henry Ford II defended the project and, not surprisingly, it survived.

Tin Lizzie. The Fiesta comes in three versions (regular, sports and Ghia, a kind of minilimousine) with a choice of three different motors (40, 45 and 53 h.p.). It features front-wheel drive, disc brakes, trim lines, rear seats that can be folded down to make room for baggage and such smaller luxury touches as capacious ashtrays and rear-window wipers. It is 15 in. shorter than the Pinto M.P.G., Ford's smallest current U.S. model--yet, during a recent Fiesta test drive, TIME Correspondent Roger Beardwood had no trouble finding room for his 6-ft. 2-in. frame.

Fiesta's European prices--about $3,200 for the standard version, $4,500 for the top-of-the-line Ghia--place the car in direct competition with such popular models as the VW Rabbit, Audi 50 and Fiat 127. "We see this as the Tin Lizzie of the future, a car that will appeal to people everywhere," says Robert A. Lutz, 44, head of Ford in Germany. Ford plans to manufacture 500 000 Fiestas a year; every fifth car will go to the U.S. starting in 1977. In Europe, the numbers are on Ford's side: since 1970 minicars have gained an increasing share of the market, notably in Germany, Italy, France and Spain.

One problem Fiesta will have to overcome is that brand loyalty in Europe is high. Another is that in countries where they are not manufactured, Fords are often discriminated against in favor of locally made cars. On the latter score, Fiesta has a distinct advantage: it will be assembled in plants in Germany, France and Spain, out of components manufactured in at least six countries. Says Lutz: "We call it the first truly trans-European car."

The most serious drawback to Fiesta's manufacturing plans at this point seems to be the labor militancy and inflation that have been on the rise in Spain since Franco's death. "I don't think our political antennae were working too well when we chose Spain for a major investment," says a senior official in Ford's European headquarters. Things are running smoothly there now. But since bodies for all the Fiestas assembled in Europe will be manufactured chiefly at the Ford plant in Valencia, Spain, a strike could mean a long siesta for Ford workers in other countries.

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