Blog Posts by Tom Libby

Ford Fiesta Quickly Becomes America's Favorite Sub-Compact

The 2011 Fiesta, Ford's first sub-compact since the Aspire was discontinued in 1998, is an overwhelming success. The Fiesta now accounts for almost 21% of the sub-compact car segment after just 10 months on the market, the highest segment share among the 12 sub-compacts. Also, the 8,107 Fiesta registrations in April mark the highest monthly sub-compact total in the last 19 months.

Model Share of Segment

Three reasons for the Fiesta's remarkable ascent include the fact that it offers some features not typically available in a sub-compact (keyless ignition and Ford’s Sync multimedia voice command system, among others), the fact that it is currently the only competitive subcompact offered by a domestic manufacturer (given the decline of the Chevrolet Aveo in anticipation of the launch of the Chevrolet Sonic this fall), and the concurrent success of the Fiesta's parent corporation and brand. The positive publicity that both the Ford Motor Company and the Ford make have received over the past 24 months has undoubtedly helped every Ford model.

Since the Fiesta's launch last summer, only two sub-compacts, the Mazda2 and Fiat 500, have enjoyed segment share increases, and both of these are new to the market, like the Fiesta. Two other subcompacts, the Versa and Fit, have managed to hold on to their shares, while all the rest have slipped. These declining models include the Aveo, Rio, Yaris and both Scions.

Segment Share of IndustryThe Fiesta has managed to make these strides in a segment that is not growing appreciably. Though sub-compacts gained share in 2008 when gas jumped to $5+ a gallon, since then the segment has retreated and remains below 4% of the industry.

The Fiesta will face stiff competition going forward. Re-designed versions of the Accent, Rio and Versa are either now arriving in showrooms or will arrive soon. And Chrysler has high hopes for the Fiat 500, which has received positive reviews. Also, this fall Chevrolet will introduce the all-new Sonic. Chevrolet hopes this vehicle, which will be the only sub-compact assembled in this country, will improve the make's share of segment following disappointing results for the Aveo.

Posted by Tom Libby, PolkInsight Advisor, Polk (07.05.2011)

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