The 2009 Ford Ka is one of the most stylish minicars currently on sale overseas

The 2009 Ford Ka is one of the most stylish minicars currently on sale overseas

For many years Ford’s sales performance in the United States has been linked closely with its top-selling pickup truck and SUV lines, but with demand for such vehicles continuing to slide the Blue Oval has acknowledged that its future lineup will have to feature much more small cars. Fortunately, Ford’s European division has been successfully selling small cars for almost as long as Ford in the U.S. has been selling pickups.

The carmaker’s CEO Alan Mulally has now reaffirmed plans to continue with development for a new-generation of Ford small cars destined for U.S. consumption, despite high fuel prices starting to recede.

Fuel "prices are going to stay relatively higher, even though they're down right now," Mulally told Automotive News last week. "The most important thing we can do is have a full complement of small and medium-sized cars and utilities that complement our larger vehicles."

The first of Ford’s new small cars will be the all-new Fiesta, which is set to enter production in Mexico in 2010. According to Mulally, an array of subcompact and Focus-sized compact cars will follow. The smallest of these, the second-generation Ford Ka, which was recently unveiled in Europe, is also a possibility but no firm decision has been made.

The Ka is currently the smallest vehicle in Ford’s lineup and is roughly the same size as the Toyota iQ and slightly larger than the Mercedes Smart.

One of the biggest hurdles for the introduction of small cars is profitability. It will be tough to replace the $8,000 to $10,000-plus profit margins on big pickups and SUVs.