Ford will commence producing the Fiesta subcompact in Naberezhnye Chelny, Russia in 2015 as it bids to offset slumping demand for the Focus compact. Ford will build the Fiesta alongside the EcoSport small SUV, the American carmaker said in a statement.
Car sales in Russia have been dropping as the country experiences an economic slump – no thanks to Western sanctions as well as declining oil prices. According to figures from the Association of European Businesses (AEB), car sales in Russia dropped 13 percent in the first 10 months of 2014 to around 2 million vehicles.
Matters were worse at Ford, which saw its sales in the period dive 41 percent to 50,226 vehicles – led by an almost 60-percent drop in sales of the Focus to 22,526 units. A reason for the drop is the seen shift customers to subcompact models. The subcompact segment has overtaken the compact segment in Russia," a Ford Sollers spokeswoman remarked.
Ford is expecting the EcoSport and Fiesta subcompacts to help it recover the lost sales from the Focus. She added that sales of the Focus have decline since it is older than some of its compact rivals. The Russian auto market is dominated by locally produced models.
The Ford Sollers spokeswoman remarked that around 99 percent of its cars sold in Russia are locally built. Locally produced vehicles are eligible a government-backed scrapping incentive, under which buyers of new passenger cars could avail of at least RUB40,000 (EUR752) discount when scrapping or trading in their old vehicles. The AEB credited the program with helping slow the drop in car sales in Russia in October.