Ford confirmed on Friday that it will build the hatchback and sedan at its Cuautitlan, Mexico, plant starting in early 2010 as part of a $3 billion investment in the country.
The Fiesta will give Ford a fuel-efficient competitor against such cars as the Honda Fit and Nissan Versa.
It's not clear whether the hatchback Fiesta will be a three-door, five-door or come in both configurations.
Ford said the Cuautitlan plant will shift from making F-series pickups for Mexico to making small cars for all of North America. The changes at the plant near Mexico City begin this year.