Ford do Brasil has launched the new, locally-made Fiesta hatchback, the first of the Amazon Project range of compact vehicles to be produced in the new Camaçari plant in Bahia state, writes Rogerio Louro.

Amazon Project vehicles will be sold in Brazil and exported to Latin and North American markets, Africa and Asia.

The first and most difficult mission of the new models is to boost Ford do Brasil's market share - the company is aiming for 15% in 2005. Ford currently has about 7% of Brazilian sales, way behind GM, VW and Fiat which each has over 20%.

Ford was the first car maker to start operations in Brazil in 1919 but a series of marketing mistakes and a lack of agility in recent decades has seen the company lag behind rivals.

In recent years newcomers Renault and Peugeot have dislodged Ford from its long-held position as Brazil's fourth-largest car maker.

Fighting back against old and new rivals, Ford do Brasil has invested $US1.3 billion to built the new Camaçari plant opened last October to produce the Amazon Project models.

The factory can build 250,000 vehicles per year (one every 80 seconds) with a modular production system where suppliers use their own equipment and workers to install complete set of components on the assembly line.

Each day, Ford confirms the production schedule for the next day and the component makers supply the assembly line with specific parts for each car on a just-in-time basis.

Twenty-seven suppliers have invested $US600 million on their own installations in the plant and a further six are located nearby.

The Brazilian-made new Fiesta is almost the same design as the Spanish-built European model and differs only in details such as the headlights and absence of side indicator repeaters.

However, the engines are very different and include the locally-made Zetec Rocam eight-valve engines in one-litre 65 hp and 1.6-litre 98 bhp versions - updated versions of the powerplants used in the old Brazilian-built Fiesta.

The new Fiesta is also offered with a new one-litre supercharged engine developing 95 hp.

This new engine - the first supercharged unit used in a Brazilian-built car - gives Ford a powerful compact which benefits from the low Brazilian industrial product tax (IPI) applied to cars with one-litre engines.

One-litre models attract a 10 percent IPI tax compared with 25 percent for cars with larger engines.

Ford do Brasil is also building a 67bhp, 1.4-litre diesel version of the new Fiesta for export only.

The company expects to export about 15,000 new Fiestas with the 1.6-litre petrol engine and the new diesel by the end of the year.

The new Fiesta hatchback is only the first step of the Amazon Project which will eventually produce five different Fiesta-based models.

Next, at six-month intervals, come the Fusion SUV (which will be built with optional four-wheel drive and exported to the USA and Canada from Brazil), a sedan plus pick-up and minivan models.

Ford do Brasil is continuing production of the old model Fiesta with a derivative called Street fitted with a one-litre engine that becomes the company's entry level compact.

The strategy of using a previous generation car as a low-price, single model, entry level version has also been used in Brazil by Fiat, General Motors and Volkswagen.