End of the road for Festiva

FORD Australia looks set to drop the Festiva from its model line-up for at least a year from the end of 2000.

Talks with Kia Motors over future model supplies appear to have collapsed, leaving Ford with few options for a replacement model in the near future.

The most likely scenario would be for Ford to abandon the bottom end market segment until the next generation Ford Fiesta is released in 2002.

The Fiesta will be developed in Europe but will also be built in South America, where labour and production costs are considerably lower - making it ideal for the price sensitive Australian light car market.

Ford has secured sufficient supplies of the existing Festiva to get through to the end of next year.

To cover the loss of a model which accounts for about 15,000 units a year, Ford Australia would probably need to introduce "stripper" models of both the Ka and Laser.

However, it would not be an ideal line-up because the Ka does not come with an automatic transmission (and has a poor engine) while there is no three-door Laser hatchback available, only a five-door.

The president of Ford Australia, Geoff Polites, did not even make a planned trip to South Korea two weeks ago to conclude discussions aimed at securing supplies of the Kia Rio.

He conceded only that the Kia deal was "looking less likely" than ever.

"It is just making less sense as a business equation because of their requirements and because of our requirements," Mr Polites said on Wednesday.

"With the numbers they require and no currency protection, we just cannot make a business case for us or our dealers.

"We wanted it - we still want it - and we have done very well with that car (the current Kia-supplied Festiva), but if it doesn't make sense it doesn't make sense." Mr Polites said that going without a replacement for a year of so was "certainly an option".

"We would just have to look at other products in the range (to cover the loss)," he said.

Interestingly, Polites has a good working relationship with the president of Ford South America, Terry de Jonckheere, who is also a Ford Motor Co vice-president and board member.

Mr de Jonckheere is a former president of Ford Asia-Pacific and consequently knows the Australian market well.