PARIS -- The 2011 Ford Fiesta subcompact has been on sale in the United States for just four months, but higher-than-expected demand for luxury options is stressing some suppliers and reducing the car's profit margins, Ford's top sales executive said.
Jim Farley, Ford Motor Co.'s group vice president of global marketing, sales and service, said U.S. demand for trim levels with leather seats and other amenities is higher than expected. That's putting pressure on some suppliers.
Demand for the five-door hatchback also took Ford by surprise. Farley said more than three of every five Fiestas sold are hatchbacks.
"It's been, frankly, a bit of a challenge because [suppliers] capacitized to supply specific content like heated seats at the rate that we told them, which is single digit," Farley said. "They're trying as hard as they can to catch up."
The lack of higher-trim variants in the Fiesta mix is crimping profits, Farley acknowledged.
"I don't think it's substantial at this point because we think we're going to catch up," he said. "It's not a loss of revenue -- it's: Can someone buy a $17,000 Fiesta vs. a $17,200 Fiesta? Obviously, we'd make margin on the $200 difference, and that's the piece that we're missing."
Farley said the average age of a U.S. Fiesta buyer is 46, but almost a third of sales are made to buyers 16 to 35. The most popular color is Lime Squeeze.
Ford launched the Fiesta first in Europe in 2008. It is now sold in more than 100 markets, and global sales of the car are expected to reach 1 million in October, Farley said at a media roundtable here last week.