[2001 ZTS]

In a few years...........

Mazda to design Ford subcompact
Paper says Ford's Japanese partner will lead development of new entry to growing small car market.
February 6, 2006: 9:32 AM EST


NEW YORK (CNNMoney.com) - Ford Motor Co. is turning to its Mazda unit to try to play catch up in the growing U.S. market for subcompact cars, according to a published report.

The Wall Street Journal reports that Mazda President and Chief Executive Hisakazu Imaki said Ford's Japanese affiliate will lead a project to develop the basic architecture for Ford's next-generation subcompact vehicle. Ford owns a controlling 33 percent stake in the Japanese automaker.

"We'll help Ford beat the Japanese," he told the paper.

This will not be the first time Ford has used a Mazda-designed basic architecture for U.S.-branded vehicles. Ford's new Fusion sedan and its Mercury Milan and Lincoln Zephyr variants are based on the basic engineering architecture of the Mazda6 sedan. The upcoming Ford Edge and Lincoln MKX crossover SUVs will use that architecture, also.

Work has just begun on the new subcompacts, Imaki told the paper, and it will be a few years before they hit the U.S. and European market.

Ford executives signaled a new push for the small car market when it announced a restructuring plan last month that included plans to close 14 plants and cut 30,000 jobs, including some sites that make sport/utility vehicles.

But other automakers are expanding into the subcompact market, as rising gasoline prices have made it one of the hotter new car segments over the past 12 months.

Sales tracker Autodata reports that subcompact cars, led by the Korean-built Chevrolet Aveo, posted segment-wide growth of about seven percent in 2005, compared with only a two percent growth in sales of other car models, and a 0.8 percent decline in sales of light trucks, such as SUV's, pickups and minivans.

The segment is noted for not just good fuel economy but also low price. The manufacturers' suggested list prices for the vehicles range from $10,500 to $14,000, according to price tracker Edmunds.com.

Other automakers are also closer to introducing new subcompacts into the U.S. market. Toyota Motor is bringing the Yaris, its best-selling model worldwide, to the U.S. market in 2006, while Honda Motor plans to have its new subcompact, the Fit, in U.S. showrooms in March.

Mark Fields, Ford's president of the Americas and a former head of Mazda, said that he believes it is not too late for Ford to make a push in the subcompact market, which he sees showing strong growth over the next five years.

"No company today is putting an American stamp on the small-car segment," he told the Journal. "It's always good to be the first mover, but it is not necessarily over if you are not."

http://money.cnn.com/2006/02/06/Autos/ford...nicar/index.htm