Ford has finally begun production of the all-new 2009 Ford Fiesta in Cologne, Germany, today. After an investment of 455 million Euros (about $674 million) to restructure and modernize the plant, Ford is expecting its 4,000 employees will be able to roll out 148,000 Fiestas by the end of the year, which is an impressive 1,900 cars each day). In January 2009, the Valencia plant in Spain will also begin building the Fiesta. There are also production plants in China, Thailand, and Mexico that are tooling up for the newest small Ford in order to meet worldwide demand, which finally includes the U.S. where it will also be sold in both sedan and hatchback configurations around 2010. Based on the Verve concept, the new compact is exactly what the automaker needs in today's efficiency-conscious marketplace, and its stylish enough not to be considered a cheapskate or eco-geek while driving.
Thinking with their wallets, and avoiding $4.59/gallon fuel prices, truck owners in the States have been sneaking across the Mexican border to fill up with low-cost diesel (in Mexico, the fuel averages just $2.20/gallon). While filling a primary fuel tank isn't illegal, Mexico prohibits additional fuel tanks (aka auxiliary tanks) to be filled and moved across the border, so many truck owners with long-range tanks are finding themselves breaking Mexican federal law. Truck owners are getting stopped on the Mexican side of the border and their trucks are confiscated while authorities run tests to determine the origin of the fuel. If found in violation, owners face stiff fines. The Mexican Consulate is offering a blanket warning for all truck owners equipped with secondary fuel tanks to not drive those vehicles into Mexico. Not only do those owners risk truck confiscation, but the Mexican fuel is not formulated to U.S. ultra-low-sulfur regulations meaning emissions components will likely be damaged.
The Rabbit is currently the most fuel-efficient gasoline-powered vehicle in Volkswagen's U.S. fleet, getting around 26 mpg on the EPA's combined city/highway cycle. But V-Dub wants something better for the U.S. market. Speaking with Bloomberg, VW CEO, Stefan Jacoby revealed that the automaker is considering bringing a subcompact vehicle, similar to the Polo, to the U.S.
With the Toyota Yaris rated at 32 mpg and the Honda Fit coming in at 31 mpg (combined city/highway), Volkswagen is hoping to meet or exceed the competition. While it's unlikely we'll see the current Polo on U.S. shores anytime soon, it's expected that the next generation will be available in the States in 2010 when the new Jetta is released, followed by a new midsize sedan that will replace the Passat.
The additions and revisions to VW's product line is an effort by the automaker to boost U.S. sales to 800,000 units by 2018, nearly tripling the 230,571 vehicles it sold in 2007. VW is also looking to build a new engine plant in Mexico, along with its recently announced Tennessee plant.
In San Diego, drivers are paying an average of $4.61 a gallon for the cheap stuff. And like the rest of the country, most of them aren't too happy about it.
But a 17-mile drive south will save them more than a $2 per gallon. Gas war? Some radio station's wacky promotional stunt? No, Mexican government subsidies that allow filling stations to sell gas for as little as $2.54 a gallon, even less if you have a pocket full of pesos.
Diesel burners have an even greater incentive to make the drive. Diesel prices in San Diego average $5.04. In Tijuana? Only $2.20.
Downside? Of course! Even if you live near enough to the Mexican border, the wait coming back into the States is supposedly terrible, sometimes as long as a two hours. Leave your HUMMER idling that long, and you'll be filling up in Chula Vista.
In a press release today officially announcing that the new Fiesta will be built at its Cuautitlán Assembly Plant in Mexico starting in 2010, Ford confirmed what we all expected: in addition to the Fiesta Sedan, it's going to build the Fiesta Hatchback for U.S. customers, as well. Previously, Ford has said it would only build the sedan version of the Fiesta for the U.S., perhaps believing that hatchbacks were still a hard sell in the U.S. Rising gas prices have erased most of the negative stigmas associated with hatchbacks, which are generally perceived to be both highly practical to own and fuel efficient to drive. Curiously enough, the Cuautitlán Assembly Plant that's being converted to build Fiestas used to build full-size F-150 trucks for the Mexican market. Now it will build small cars for all of North America.
Ford also announced that its Chihuahua Engine Plant in Mexico that currently makes four-cylinder engines will add diesel engines for light- and medium-duty trucks to its assembly lines, and that a brand new transmission plant will be built in Guanajuato in a joint-venture with Getrag. All told, Mexico will be getting a $3 billion investment from Ford and its suppliers, the largest ever automotive investment according to Ford, and around 4,500 new jobs will be created as a result.
Ford has been teasing us with a US-bound Fiesta for years, and the Blue Oval has only said that the well-executed B-car would be built in North America. With time to start producing Fiestas running short, Ford appears ready to publicly announce where the vehicle will be built, and it looks like the Fiesta will be made south of the border. The extremely low cost of labor in Mexico makes building inexpensive economy cars there a no-brainer, and Ford's Cuatitlan plant already builds the current Euro Fiesta and a Fiesta-based vehicle for the Mexico/Brazil markets.
The Fiesta is scheduled to appear Stateside by 2010, but with the radical shift towards smaller, more efficient vehicles, we wouldn't be surprised if Ford bumped up that timeline.
With Fiat preparing to bring some of its products to the American market, local government leaders have been hard at work courting CEO Sergio Marchionne to produce vehicles in their state or province. Marchionne declared in March that with the weak American dollar, his company would have to strongly consider local production for sales in North America.
Among those politicians who have reached out to Fiat, congressional representatives from the states of Kentucky and Georgia have met with executives from the Italian auto giant to discuss the possibility of opening plants in their districts. However the premier of Ontario seemed to take it one step further by flying to Italy to meet with Marchionne, who himself was raised in the same Canadian province. After General Motors announced the closure of two plants in the past couple of months, Ontario is keen to find tenants for the abandoned facilities. Marchionne, meanwhile, has expressed interest in producing in Mexico, allowing Fiat to extend its operations in Latin America northward to support its foray into the North American market.
As for distribution, while Fiat already networks established for its Case New Holland agricultural equipment division, as well as for its top-end brands Ferrari and Maserati. However Fiat is likely to set up separate distribution channels for Alfa Romeo and, if and when the day comes, the Fiat 500.
As the dollar weakens, European manufacturers continue to scramble for manufacturing opportunities offshore to salvage profits. Fiat is the latest to jump into the fray. Company sources are saying the Italian automaker is currently considering Mexico as a production site -- with their eyes on an existing plant that could be tooled up for 150,000 cars a year. With their Alfa Romeo brand launching in the United States next year, and Fiat sales up significantly in South America, a plant in centrally-located Mexico could easily supply demand for both markets. If approved, the Mexican plant would start building Alfa Romeos and Fiats in 2011.
It's been easy to forget about Nissan's small car offerings with the recent introduction of the redesigned Maxima in New York and the impending arrival of the GT-R for the first time on U.S. shores. But some of Nissan's more compact vehicles remain the bread and butter of the brand and fill the transportation needs of the masses. However, they're far from exciting and recent sales in the U.S. bear this out. To cope with these slow movers, Nissan is planning to idle its Aguascalientes, Mexico plant for a seven days this month so it can realign production with demand. According to Automotive News, the slowdown of car sales in America is expected to cause a bit of a slump for Mexico's burgeoning automotive industry, as many of the export models built there are intended for sale in the States. After the seven day closure, things should be back to normal, and hopefully sales of Nissan's small cars will rise along with fuel prices.
Alfa Romeo is returning to the US market in about a year, offering the zooty 8C Competizione and 8C Spider atop a range of less spectacular offerings. While the top-end 8Cs will probably be Italian emigres, the 149 and 169 sedans could be put together in Mexico. Alfa doesn't have a hard and fast decision yet, and could pick another site, even one in North America. Moving the labor to Mexico for the volume sellers might prove to be a wise move on Alfa's part. The dollar continues to take a beating, pushing up the cost of European items on US sales markets, and building somewhere else would sidestep some of those increased costs. Alfa is trying this idea in China, too, where Chery will assemble automobiles for that market. We're all for it if it gets the keys to some stylish Italians in our hands while holding the prices down. The quality can't be any worse than it was in the bad old days that led to the notorious reputation for unreliability that afflicted Italian marques. Besides, those shop queens were so joyous to drive, they made suckers out of all of us, and we'd do it again, given the chance.
