Ford Agrees to Import Small Korean Autos : KIA to Start Delivery of Mini-Cars in 1988
Ford, the last of the Big Three auto makers to line up a supply of cars from Asia, said Thursday that it has agreed to import mini-cars from a Korean firm beginning in the 1988 model year.
At the company’s annual meeting here, Ford Chairman Donald E. Petersen announced that Ford has reached an agreement to buy mini-cars (which are smaller than subcompacts) from KIA, a Korean truck maker that has just received Korean government permission to begin auto production.
KIA is partly owned by Mazda Motor Corp. of Japan, which in turn is 25%-owned by Ford. The Korean company is expected to produce up to 100,000 mini-cars annually, but Ford said it plans to buy “substantially less” than that.
Company Undecided
A Ford spokesman said the company has not decided whether the mini-cars will be sold through its Ford Division or the Lincoln-Mercury Division. A Mazda spokesman wouldn’t comment on whether Mazda plans to buy small cars from KIA as well.
The KIA mini-cars will be smaller than the Ford Escort and Mercury Lynx subcompacts that are currently Ford’s smallest domestic models and are likely to be the company’s lowest-priced offerings in North America.
Some analysts believe that mini-cars, still rare on American roads, could account for sales of nearly 500,000 units by 1990, because of their extremely low prices and high fuel economy.
Petersen also said Ford is continuing to hold discussions with Mazda about buying cars from Mazda’s first U.S. assembly plant, which is being built outside Detroit. That facility is expected to begin production in 1987.
In recent years, Ford has lagged behind both General Motors and Chrysler in obtaining supplies of small cars from affiliates in Japan and Korea.
GM’s Chevrolet Division already imports two small cars from Japan, the Chevy Sprint and Spectrum models. And, beginning in the 1987 model year, Pontiac will import Korean subcompacts that will be built by a new joint venture between GM and Korea’s Daewoo Group.
Chrysler, meanwhile, has imported small cars from Japan’s Mitsubishi since the early 1970s, and has been discussing the possibility of small car production in Korea with the Samsung Group, a major Korean firm.
Two Firms Ahead of Ford
Both GM and Chrysler have also beaten Ford in developing U.S. joint ventures with Japanese auto makers.
In December, GM and Toyota began production of a Japanese-designed subcompact at their joint venture in Fremont, and Chrysler has just announced plans to set up a joint venture with Mitsubishi in the Midwest beginning in late 1988.
Although it is building an assembly plant in Mexico that will begin producing Mazda-designed subcompacts for the American market by 1987, Ford has not made public any plans for a U.S. joint venture with a Japanese auto maker.
