The Ford Ka is based on the same platform that underpins the Fiat 500 and the two are actually built off a single production line at a plant in Tychy, Poland. Chrysler, however, plans to source American versions of the 500 from one of its North American plants and according to the Detroit Free Press Ford may be able to source its Ka from the same plant.
The benefit to Chrysler would be improved economies of scale brought about by the increased production volumes. By this same logic, there’s hope Chrysler may revive its own plans for a new Dodge minicar that would also be based on the Fiat 500 platform. The most likely plant for these three vehicles would be Chrysler's Toluca facility in Mexico.
Already General Motors is delivering its Chevrolet Aveo, which though somewhat larger than the Ka, fits into a similar market segment. Likewise the Cruze small-midsize sedan may offer competition in terms of fuel economy and overall cost. Japanese competitors like the Toyota Yaris 3-door and Scion xA are already well-established.
Whatever the final decision of Ford on the Ka matter, the company is likely to need a small hatch in the U.S., below the Focus and Fiesta, to be able to compete in the future. The Ka is the most likely and logical candidate, as this reconsideration illustrates.