In doing so, Ford will become the first Australian car manufacturer to respond to the increasing popularity of smaller vehicles by producing the company's globally successful Focus small car alongside its current Falcon and Territory model lines.

Rising fuel costs and changing consumer lifestyles have created a dramatic shift in customer buying preferences with small cars accounting for 21.7 per cent of all new cars sold in Australia year-to-date, up from 15.4 per cent in 1998.

By manufacturing the European designed and engineered Focus in Australia, Ford will be able to enhance the vehicle's key product attributes by enabling further consideration of Australian-specific customer demands.

The Ford Focus will also represent the most fuel efficient and environmentally friendly vehicle produced in Australia, with the current manual diesel model offering fuel economy levels of 5.6 litres/100 km and CO2 emission levels of 148g/km. Both petrol and diesel Focus variants will be manufactured in Australia.

Ford Australia is preparing for an annual production of 40,000 Focus vehicles, which will add approximately 300 new jobs across Ford's operations, returning the Campbellfield manufacturing assembly plant to full capacity utilisation. In addition, the company's Stamping Plant in Geelong will stamp a significant number of panels for the new vehicle.

Australian component suppliers will also have the opportunity to become involved in production of the new Focus, with talks beginning immediately to determine the opportunities for inclusion in the fully integrated manufacturing process.

The Focus will be sold in Australia as well as exported to regional markets, including New Zealand and South Africa. Significant additional export markets will be announced closer to 2011.

"Manufacturing the Ford Focus in Australia will allow us to deliver key business requirements of improving our capacity utilisation and strengthening Ford Australia's integration into the global Ford Motor Company. It also reflects the contemporary market demands for smaller vehicles and opens up significant additional export opportunities within the region," said Ford Australia President Mr Tom Gorman.

"With the support of the Federal Government and Victorian State Government, Ford Australia will be the first local car manufacturer to respond to these changing market dynamics in this manner. We look forward to offering Australians their first locally produced small car in more than a decade."