Last Updated Apr 10, 2008 9:04 PM EDT
That concept has been OK in America, too, for luxury brands like BMW with its iconic 3 Series, where consumers expect to pay a premium price. It's a taller order for mass market brands like Ford to change U.S. customer expectations. A test case will be the upcoming Ford Fiesta, an all-new car based on the Ford Verve concept car, due for the U.S. market in 2010. Starting with the Fiesta, a model name last used in the United States in the late 1970s, Ford's European operations will be in charge of developing small cars for the rest of the world. "We're really getting ourselves back into the small car market which is very, very crucial because that's going to be a growth market not only this year, but in years to come," said George Pipas, Ford's U.S. sales analysis manager.
Ford said a hopeful sign is that the redesigned 2008 Ford Focus small car on average is selling for about $2,000 more than the vehicle it replaced, thanks to a higher level of standard and optional equipment, like Ford Sync, which allows wireless connectivity to electronic devices like cell phones. Ford says that is evidence that young buyers, and buyers trading out of bigger, less fuel-efficient vehicles, are willing to pay for creature comforts in a smaller package. "The idea of young people buying cars (solely) for cheap transportation just isn't true," said Jim Farley, Ford group vice president, marketing and communications. "That's something I learned from my Scion experience," he said in an April 1 conference call for reporters and Wall Street analysts. Before joining Ford last year, Farley was general manager of Toyota's Lexus Division. Before that, he was in charge of launching the Scion brand for Toyota Motor Sales U.S.A. Inc. in 2003.