Mazda has confirmed that the car it will build at the Ford plant in Valencia, Spain, is the next-generation Demio, a compact hatchback.

Production for the European market will begin early in 2003 with an initial annual production target of 40,000.

Mazda also plans to start European production of the 323 (Familia) 5-door in the near future.

The next-generation Demio will share its platform with the new-generation Fiesta due to be launched at this year's Frankfirt motor show.

Mazda is considering using Ford petrol engines and buying European-made diesel engines for the European-built Demio.

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Ford Strategic Review

The North American Automotive Industry