Ford’s new Ka will go on sale in January replacing the venerable and popular original which was launched in 1996.

To keep costs down, the Ka was developed jointly with Fiat and is based on the 500/Panda platform.

“Fiat was a natural partner for us because of their small car expertise,” said Ford’s Ka project and business manager, Tony Dixon , adding that the small car business was a difficult one to make money in.

Ford has gone to some lengths to differentiate the Ka from the 500, Dixon said. Improvements to the suspension and steering are what the keen driver will notice most. Ford has fitted a rear anti-roll bar which improves stability and stiffer bushes which has allowed the springs to be set 30% softer than on the Fiat 500 for a more comfortable ride.

It translates into a car that drives with the same nimbleness and comfort of the highly-acclaimed Fiesta . Dixon said everything a customer sees, hears or feels on the new Ka is Ford and this has extended to tuning the engine software to give both the 1.2 litre petrol unit and 1.3 litre diesel slightly different characteristics to the Fiat versions.

The importance of the Ka was stressed by Ford of Britain chairman Roelant de Waard. The sub-B segment in which it competes is today worth about 8% of total sales, up from 4.3 % in 2003.

When it was launched 12 years ago, the Ka had only eight competitors – today it has 21. Throughout all that it has been segment leader, taking 20% of all sales.

De Waard forecast sales in 2009 will be around 25,000, about 10% down on the current Ka and in line with the general 10% decline in the market which he expects to continue throughout next year.

A diesel joins the line-up for the first time and although that is a bit of an unknown quantity, de Waard expects it to take about 4% of sales.

There will also be a low-emission Econetic version; final specification, including which engine will be used, has not been finalised nor will the company put a date on when it will arrive.

“We could use a Fiat engine but there’s nothing stopping us using one of our engines,” said Dixon.