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The 65-mpg car Ford won't sell in US

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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 (F, news, msgs), known widely for lumbering gas hogs.

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 (TM, news, msgs) and Honda Motor (HMC, news, msgs) 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 toward 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 as, or even cleaner than, gasoline-powered cars, and they are at least 30% 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% 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 Motor (NSANY, news, msgs) and Honda, which long opposed building diesel cars in Europe, plan to introduce them in the United States in 2010.

But Ford, whose Fiesta ECOnetic compares favorably with European diesels, can't make a business case for bringing the car to the United States.

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 United States.

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.


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Manatee_man

17 responses // The 65-mpg car Ford won't sell in US

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    Ford plans to make a gas-powered version of the Fiesta in Mexico for the United States. 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," Fields says.

    Video: The diesel alternative
    The question, of course, is whether the U.S. will ever 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 could take off, leaving the carmaker to play catch-up -- despite having a serious diesel contender in its arsenal.

    This article was reported and written by David Kiley for BusinessWeek.

    Manatee_man
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    What spin master thought of that ditty? We can't sell a car that gets great milage in the U.S. because it runs on diesel. Tell it like it is, they refuse to sell it because their big oil buddies wouldn't like it. They're not through robbing us yet. Look at what happened to the electric car.

    bluestranger
    1 response to this
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    This sounds like a job for RALPH NADER!

    Or for CONCERNED CITIZENS!

    If we want cars like this to sell in the USA< we need to organize!

    We need to lobby congress for higher CAFE standards, and we need to contact Ford and tell them what a load of BS it is that they are not offering the vehicle here in the USA>

    asherp
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    I can't tell you what a psychological joy it is for me to run around in my Prius.

    Auto makers will wake up if you hold firm and buy 50 mpg or better. Approximately 12.50 miles/ dollar which should be discussed when comparing diesel.

    So what's the problem? Demonstrate to conquer, electric will follow, and I will be the first to buy one.

    What I can't figure out is why a 750 pound motorcycle with a 220 pound " 6'-2" fat boy" upon it only gets 50 mpg...Come on on Harley, get with it!

    Yeah, yeah, we don't ride for the mileage..so true, so true!

    I happened upon a "car show" this week end. I didn't buy a ticket because I don't like that much raucous and humanity. What I did observe is the mentality of man and machine, and machine, and machine, and machine...This car thing, it runs deeper than I thought. $80,000 to a $100,000 for an engine which can get a car up to 300 MPH in a quarter mile? Sounds necessary to me! Who are they voting for?

    WisconsinNorm
    6 responses to this
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    All the people in my parents new neighborhood have huge trucks, SUVs or huMmErs! I rented their house while they are transitioning and some guy in a Huge truck ran over my kitty!!! (*&2#$$!@!!)
    I feel that a law requiring non-business vehicles of a certain size or height to install front and rear cameras upon registration would help make it further cost-prohibitive to drive a tank like Dr. Strangelove. *A teenage boy in a huge truck hit a person in a wheelchair in Carmel/Big Sur area and said he didn't even know! Unless you live on a mountainside with seven kids, why do you need the ForestRavager Eddie B XXL?!

    Denica_Cassandra
    1 response to this
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    Oh, we will never see an American car company buying into this whole 'going green' business.

    simonedward
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    It's a shame that domestic auto makers don't have the foresight to see that it's in their interest to have some share of the fuel effiicient market. There will be a time when they have no choice, at which point they will be struggling to catch up with foreign manufacturers.
    And we do need to take a stand and let our local and national governments know that we support higher standards for fuel efficiency.

    contactkatrinaford
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    @contactkatrinaford, re: "And we do need to take a stand and let our local and national governments know that we support higher standards for fuel efficiency. "....

    there's a faster way....

    the next time you want or need to buy a car, BUY THE HIGHEST FUEL ECONOMY CAR YOU CAN AFFORD.

    that IS the fastest way "to get the message to the car makers."

    you need government help with that decision?

    plusaf
    1 response to this

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