Will the Ford Fiesta Start a Small-Car Stampede? Maybe 3 Years Ago, but Not Now

A crucial test of the notion that Americans are ready to buy smaller cars in bigger numbers begins later this month, when the Ford (F) Fiesta starts reaching U.S. showrooms.

The Ford Fiesta is a key part of the Ford strategy to shift its product mix away from big pickups and truck-based SUVs to smaller and more fuel-efficient cars and crossover SUVs, which are based on car platforms.

Domestic rivals General Motors and Chrysler are taking a similar approach. The bottom fell out of big pickups and SUVs when gas prices started to climb in 2004, ultimately spiking at around $4 per gallon in 2008.

Ford's new generation of small cars, including the Ford Fiesta and the Ford Focus, were designed in Europe, where high gas prices have been a fact of life for generations. GM is getting small cars from GM Daewoo in South Korea. Chrysler will be getting small cars from Fiat (FIATY.PK).

The trouble is, the all-new models in any given model year reflect the auto industry's best guess of at least three years ago, and probably more like four or five years ago, of what market conditions would be like today. Even to shift the mix of existing models, it's not a whole lot faster -- maybe half of that time in most cases.

For 2010, that means today's new models were on the drawing board when Americans were far more alarmed about gas prices than they are now.

The Ford Fiesta starts arriving in U.S showrooms later this month, but it won't be widely available for at least another month. By this fall, then, there should be a pretty good early indication whether the stampede to small cars that seemed so obvious a few years ago will turn out to be a stampede, or a trickle.

Photo: Ford