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Why Ford Europe Is Shifting Its Small-Car Strategy

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With the introduction of the new Ford Ka+ (pictured), the automaker has officially exited the mini car segment in Europe, bumping its smallest, most budget-friendly offering up into subcompact territory. The Ford Ka+ is a full 12 inches longer than the old Ka it replaces, and it has five doors rather than three.

This is just one example of how Ford is shifting its small-car strategy in Europe – killing off its sole mini car offering, and nudging the higher-priced Fiesta a bit further upscale. The shifts are taking place as Ford Europe CEO Jim Farley targets an operating margin of 6 to 8 percent, and while the subcompact space hasn’t historically proven the most profitable, it is a vital one in the region, and it’s growing.

According to Automotive News, cars costing up to €13,000 (about $14,700 US) represent about 400,000 unit sales. And, along with higher-end subcompacts exceeding €20,000 ($22,500 US), sales are growing. Ford Europe VP of Marketing, Sales and Service Roelant de Waard explained the migration of customers down into smaller cars by saying: “Today’s customer doesn’t want to pay for features that are not relevant or not often used, so they are effectively right-sizing.

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“We see a growing group of more affluent customers who want to downsize from larger more expensive cars, but who still expect the premium experience features and technologies they are used to.”

As such, it’s important that Ford Europe get the subcompact market just right. The Ka+’s predecessor, which shared its platform with the Fiat 500, failed to ever come close to the same level of success. Likewise, the Ford B-MAX has faltered in showrooms as customers have flocked to SUVs and crossovers, prompting the automaker to plan restyling the MPV to give it a more “crossover” appearance, according to Automotive News‘ sources.

The EcoSport was already made-over in 2015 to appeal more to European buyers, following a weak launch in the region in 2014. The lesson learned from that crossover’s initial European appearance was clear: what resonates with consumers in India and Brazil won’t necessarily cut it in Europe.

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Written by Aaron Brzozowski

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

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