Don’t hold your breath for a cheap Ford – It probably won’t happen again

It’s highly unlikely that we will ever get an affordable Ford again akin to the once-loved EcoSport, Fiesta, and Figo.

For this, we have electric vehicles (EVs) and increased safety regulations to blame.

At the recent launch of Ford’s new entry-level crossover, the R569,900 Puma, president of the South African subsidiary Neale Hill said a budget-focused model will not bring the return on investment that the company requires to produce a new car due to current market conditions, referring to the development and accelerating adoption of new-energy vehicles.

The world is moving towards a greener future and internal combustion engines (ICE) won’t be the only options on the market in the near future anymore, so to avoid falling behind in this segment and losing precious market share, it’s more important to invest in hybrids and EVs now than it is to spend money on another small petrol car.

Spending capital on an EV factory will see Ford make use of the facility for decades to come with minor upgrades through the years, as opposed to building or repurposing another facility specifically for a compact ICE hatch that may again have to be transformed in a handful of years to produce EVs or hybrids.

Additionally, Ford has created its own high standards for safety over the years and there are certain aspects it will not compromise on to produce a car at a lower cost, said Hill.

Therefore, should it adopt these safety technologies on a smaller car it will most likely turn out not to be as affordable as we want it to be.

When asked by media about the viability of a small vehicle exclusively for South Africa and built as an auxiliary product at the Ford Silverton plant, Hill said that the local market neither has the volume nor the scale to make such a product feasible.

Using the legendary Bantam as an example, the executive said that a new version of the compact bakkie may be able to move around 2,000 units a month, necessitating Ford to build 24,000 units a year, give or take.

This isn’t nearly enough volume to justify a large enough cash injection to build an entirely new production line within an already full factory, which in turn will require the manufacturer to look for an export market to support sales.

However, with the world moving to hybrids and EVs and away from fossil fuels, and the fact that the Bantam was only ever popular on our roads and not really anywhere else, this will prove rather difficult and not worth the investment.

Furthermore, the budget market is “particularly challenging” due to the high incentives needed to get a price-conscious consumer into a new car, while margins on these vehicles are generally lower than in any other category, which leaves little, if anything, for Ford to take home after the sale is made.

“We’d love to [build a small car for South Africa], but the economics just don’t work,” said Hill.

Going forward, Ford has made it clear that it will focus on larger and more profitable ICE vehicles and stick to electrification for its smaller models.

Forever is a very long time

A wallet-friendly Ford may not be on the cards right now, but “forever is a very long time” and a budget vehicle isn’t off the table completely, said Hill.

Ford already has a number of models in the pipeline for South Africa that are expected to be big volume players, said the subsidiary president, which usually means a low asking price that appeals to a large chunk of buyers.

A cheaper Puma won’t be one of these, but they may be a product of a partnership between the American manufacturer and one of its Chinese associates.

Ford constantly looks at everything available to it at a global scale, including small SUVs made by its partners such as China’s Changan and JMC, said Hill.