Ford Motor Co. said it will end European sales of the Ka+ minicar as part of the automaker's drive to improve profitability in the region.
Minicars have become problematic for automakers in Europe because their low retail price means it is not profitable to equip the cars with expensive emissions-reduction technology needed as the European Union introduces tougher CO2 reduction targets to help combat climate change.
A Ford spokesman said the Ka+ would be subject to CO2 penalties in 2020, "making it less attractive to customers in a competitive segment."
PSA Group's Opel-Vauxhall unit has said it will drop its Karl and Adam minicars. PSA has also hinted that the Peugeot 108 and Citroen C1 might be dropped after the current generation. Volkswagen Group is not expected to directly replace its VW Up, Skoda Citigo and Seat Mii minicars and is instead working on how to sell affordable battery-powered city cars with zero emissions.
Ford began importing the Ka+ into Europe from India in 2016 as a replacement for the smaller Ka that was built in Fiat's factory in Tychy, Poland, alongside the Fiat 500, whose platform it shared.
Ford sold 22,406 Ka+ models in Europe through May, down 13 percent on the year before, according to market analysts JATO Dynamics. Last year, Ford sold just over 50,000 Ka+ units in Europe.
Dealers were told as early as April that Ford would drop the Ka+, smallest car in its range. Shipments will officially stop in September, the Ford spokesman said.
Ford has previously said it will also ax the C-Max and Grand C-Max compact minivan range.
In January, Ford unveiled a plan to fix its poor profitability in Europe that includes cutting 12,000 jobs by the end of 2020. The cost-cutting also includes the closure of an engine plant in Bridgend, Wales, and exiting the passenger car market in Russia.
Ford posted a $53 million profit in Europe in the second quarter for Europe, reversing a $73 million loss in the same quarter of 2018. Restructuring actions in Europe and South America cost the automaker $1.2 billion in special charges during the quarter.
Ford is overhauling its product lineup in Europe to focus on more profitable vehicle lines such as SUVs and commercial vehicles, including launching the Puma small SUV later this year.
"We are introducing exciting vehicles soon that will better match customer demand in Europe," the spokesman said.
Ford said in July it would launch an electric car in Europe in 2023 based on VW Group's MEB platform, following an electric crossover in 2020.
The company also said it would introduce two more utility vehicle nameplates in Europe in the next five years.
Ford said in the second quarter analyst call on Wednesday that a 'Baby Bronco' new small rugged utility planned for 2020, would not be one of them. The car will be sold only in North and South America.