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Ford and Fiat Ink Agreement on Development of New Small Cars for Europe


Moving forward on the Memorandum of Understanding signed earlier this year (earlier post), Fiat Group and Ford Motor have signed a definitive agreement to co-operate on the joint development and production of vehicles in the European small car (sub-B) segment.

Fiat and Ford are already working jointly on the development of the new vehicles, a new Fiat 500 and a replacement for the current Ford Ka in Europe. The current Fiat Panda platform will be the basis for the development of the new cars, which will be manufactured in Fiat’s existing Tychy facility in Poland, where Ford engineers will contribute to the development of the models. The vehicles will use Fiat powertrains built in Poland and Italy.

The strategic cooperative agreement with Ford represents another milestone in our strategy that calls for targeted alliances aimed at sharing financial and industrial resources on new products and platforms. It is consistent with successful ventures, established with major partners including PSA Peugeot Citroën and Suzuki, and current discussions with the Indian group Tata Motors.

—Sergio Marchionne, CEO of Fiat Group and Fiat Auto

Ford of Europe has amassed considerable expertise in the development of small cars, and is recognized for its class-leading driving dynamics. Fiat is the ideal partner for us in this particular project, as they are acknowledged as having been for many years one of the world’s leading manufacturers of small cars. The decision to combine forces with Fiat in this highly competitive area gives us the opportunity to minimize unit costs, while developing highly competitive products which will be true to our respective brand values.

—John Fleming, Ford of Europe President and CEO

The new cars will come to market in the 2007-08 period. The projected annual volume will be around 240,000 units, divided evenly.



So let me get this straight. Ford wants to partner with someone to help build small cars, and Fiat came up as the best choice? Maybe they are better now, but Fiat has a reputation for building cars that aren't terribly reliable.

This almost smells like they want this to fail so they can shove larger cars down our throats.


Eric, did you forget your tinfoil hat today? Ford and Fiat are well known in the small car arena, outside of the US. In fact, I'd say the conspiracy lies in the fact that you can't buy Ford's (or anyone's for that matter) small cars in the US. But then, that's not really a conspiracy either. More of a lack of interest in the US market.


I owned two small Fiat cars when living in Ireland. Both served me well. I think Fiat is good at small cars, and it's generally suggested that they are less capable when it comes to larger cars, or higher end versions of their small models.

Fiat are very successful in Europe. The Punto is a big seller, as is the Panda. Ford could do worse than partner with Fiat. One thing you might be aware of is that Fiat is a leader in diesel engine technology. Their 1.3 liter multijet diesel engine is a fantastic little unit and it might be part of the draw for Ford.

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