Ford Won't Sell 65-MPG Fiesta in US
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Ford Won't Sell 65-MPG Fiesta in US
Ford Won't Sell 65-MPG Fiesta in US
http://money.aol.com/news/articles/_...a-in-us/164929
http://money.aol.com/news/articles/_...a-in-us/164929
(Sep. 8) - 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 , known widely for lumbering gas hogs.
Ford
Ford can't justify selling the diesel-powered Fiesta ECOnetic to the United States, where only 3 percent of cars on the road use diesel, due largely to the fuel's higher costs and association with tractor-trailer fumes.
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 and Honda Motor 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 to 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 or cleaner than gasoline and at least 30 percent 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 percent 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 and Honda, which long opposed building diesel cars in Europe, plan to introduce them in the U.S. in 2010. But Ford, whose Fiesta ECOnetic compares favorably with European diesels, can't make a business case for bringing the car to the U.S.
TOO PRICEY TO IMPORT
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 U.S. 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 U.S. 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," says Fields.
The question, of course, is whether the U.S. ever will 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 takes off, and the carmaker finds itself playing catch-up -- despite having a serious diesel contender in its arsenal.
Ford
Ford can't justify selling the diesel-powered Fiesta ECOnetic to the United States, where only 3 percent of cars on the road use diesel, due largely to the fuel's higher costs and association with tractor-trailer fumes.
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 and Honda Motor 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 to 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 or cleaner than gasoline and at least 30 percent 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 percent 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 and Honda, which long opposed building diesel cars in Europe, plan to introduce them in the U.S. in 2010. But Ford, whose Fiesta ECOnetic compares favorably with European diesels, can't make a business case for bringing the car to the U.S.
TOO PRICEY TO IMPORT
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 U.S. 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 U.S. 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," says Fields.
The question, of course, is whether the U.S. ever will 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 takes off, and the carmaker finds itself playing catch-up -- despite having a serious diesel contender in its arsenal.
#2
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Dumb. I actually like driving Fiestas, I got a f'ing ticket in Spain in one. I did not know it until I tried to leave the country. I would love a little car to chase parts and smoke Corollas on the on ramps!
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Its because the majority of America has a serious aversion to diesel engines. They seem to think they only belong in tractors, construction equipment, and big trucks.
#5
Melting Slicks
lets not forget that taxes bring diesel fuel to about 50 cents more than premium. (at least around these parts).
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This car (and cars like it) is such an oppurtunity for an American company and the American people. A small shift in gas tax could make deisel vehicles very attractive. How much demand would it take here for Ford to build these in America? We could use the work.
#9
Le Mans Master
Here is Csaba Csere's commentary on diesel engines in the US from Car&Driver a few months ago.
Ecoboost... and lots of it.
They don't. They need urea injection.
Add in the fact that the diesel engine is more expensive to manufacture and service. Add the costs associated with the urea injection and particulate filters and the break even point on a diesel B-car goes to infinity.
Don't even get me started on hybrids...
-Matt
They don't. They need urea injection.
Don't even get me started on hybrids...
-Matt
#13
Safety Car
It has always struck me as brutally ironic that we can have laws called "The Clean Air Act" when I'm watching a Semi drive along and these huge plumes of thick black smoke come out the stacks. Because the laws are always about the auto emissions, it's ironic. Where are the regulations on these trucks? Ridiculous.
#14
Team Owner
It has always struck me as brutally ironic that we can have laws called "The Clean Air Act" when I'm watching a Semi drive along and these huge plumes of thick black smoke come out the stacks. Because the laws are always about the auto emissions, it's ironic. Where are the regulations on these trucks? Ridiculous.
NEW EMISSIONS STANDARDS FOR SMALL GASOLINE ENGINES
The EPA issued a long awaited final rule last week designed to significantly reduce emissions from small marine and gasoline powered engines. The final rule will cut nitrogen oxide and hydrocarbon emissions from engines used in lawn mowers, chain saws, and other small equipment by 35 percent. The final rule will also reduce both hydrocarbon and nitrogen oxide emissions from marine engines by 70 percent with an additional 20 percent reduction in carbon monoxide emissions. The reductions take effect in 2011 for lawn and garden equipment engines of 25 horsepower or less and in 2010 for gasoline-powered personal watercraft and inboard and outboard engines.
#15
Ever since the mid 70's Arab Oil embargo, the hand writing for Americans wanting fuel eficient well built cars, has been on the wall, otherwise how would the forign automakers have sold so many of them.....
Letting the Japanese have a foothold in this market and management and labors total inability to do anything but fight each other is like rearrainging the chairs on the Titanic. While Toyota kickes there collective asses.
Gm and Ford are both examples of how a long term series of greed, stupidity, and internal politics, being able to completely destroy the Goose that laid the golden egg. There are analysts who think GM could hit the wall in late 09. If that happens I hope every one takes note, and realizes there could be paralells for America as a whole.
#16
Team Owner
HAHA,,, but you are giving them too much credit.
Ever since the mid 70's Arab Oil embargo, the hand writing for Americans wanting fuel eficient well built cars, has been on the wall, otherwise how would the forign automakers have sold so many of them.....
Letting the Japanese have a foothold in this market and management and labors total inability to do anything but fight each other is like rearrainging the chairs on the Titanic. While Toyota kickes there collective asses.
Gm and Ford are both examples of how a long term series of greed, stupidity, and internal politics, being able to completely destroy the Goose that laid the golden egg. There are analysts who think GM could hit the wall in late 09. If that happens I hope every one takes note, and realizes there could be paralells for America as a whole.
Ever since the mid 70's Arab Oil embargo, the hand writing for Americans wanting fuel eficient well built cars, has been on the wall, otherwise how would the forign automakers have sold so many of them.....
Letting the Japanese have a foothold in this market and management and labors total inability to do anything but fight each other is like rearrainging the chairs on the Titanic. While Toyota kickes there collective asses.
Gm and Ford are both examples of how a long term series of greed, stupidity, and internal politics, being able to completely destroy the Goose that laid the golden egg. There are analysts who think GM could hit the wall in late 09. If that happens I hope every one takes note, and realizes there could be paralells for America as a whole.
well they say the average cost of currency manipulation from Japan gives then an 4500 doolar average per car. Guess that is not a level playing field is it? Japan also closes it's car market entirely to foreign competition why do we let them sell here?
#17
Former Vendor
It's funny. I have a 91 in the yard that get around 35-38 MPG according to my friend that gave it to me. Now here we are almost 20 years later trying to get good gas mileage.
I was going to build a iceracer out of it, but that didn't happen. Now I use it as a little tractor. It's easy on the grass because of it's little weight and narrow tires. Over labor day weekend I built a set of chains for it, so I can haul firewood in the winter time.
Randy
I was going to build a iceracer out of it, but that didn't happen. Now I use it as a little tractor. It's easy on the grass because of it's little weight and narrow tires. Over labor day weekend I built a set of chains for it, so I can haul firewood in the winter time.
Randy
#18
Le Mans Master
Diesel is a PITA. It is expensive, so the better gas mileage has less of a reward and you can't just pull into any gas station. You would have to plan your trips and make sure you had enough if you couldn't find a gas station with diesel. It's like E85 on the east coast. I see all these people driving around in these flex fuel cars and after traveling up and down the east coast, have YET to see E85 at a single gas station.
#19
Le Mans Master
Sulphur?
Curious that, although Canada ranks just ahead of the US
(33rd and 34th, respectively,) SMART sold the diesel versions of
the ForTwo here for several years before switching to gasoline
and entering the US market. Perhaps a difference in availability
and/or consistency of the low suphur grade accounts for the
seeming higher availability of diesel vehicles north of the 49th?
.
Curious that, although Canada ranks just ahead of the US
(33rd and 34th, respectively,) SMART sold the diesel versions of
the ForTwo here for several years before switching to gasoline
and entering the US market. Perhaps a difference in availability
and/or consistency of the low suphur grade accounts for the
seeming higher availability of diesel vehicles north of the 49th?
.