Ford and Mazda have decided to build their new small cars in Valencia, Spain, and pointed the way to future collaborative projects.

Ford is to build the next generation Fiesta at the Almussafes plant, which is also to become the home of the new Mazda B-class small car.

Almussafes will continue to produce the Focus and Ka.

Mark Fields, Mazda Motor Corporation president, said: “We selected Valencia, in part, because the plant and its employees have demonstrated their ability to produce two totally different vehicles on the same site.

“The decision is a win-win for both Mazda and Ford. It gives us a cost-efficient European production base and it makes us less vulnerable to currency fluctuations. It also enables Ford to enhance the use of its facilities by accommodating Mazda products.”

He added that future collaborative projects were possible. “Our partnership with Ford Motor Company gives both sides many strategic options, including building Mazda cars and trucks at Ford facilities and vice versa.”

The new vehicle programmes are in addition to another major sourcing contract already awarded to Valencia. It is to be the sole European source for the new Duratec I4 engine, starting in 2002.