In the early 1970s, European demand from consumers for superminis was rising. Medium Fords such as the United Kingdom-built Ford Cortina were traditionally conventional front-engined, rear wheel drive cars, but their competitors were launching very small cars like the Fiat 127 and the Renault 5 which used front wheel drive layouts. The effects of the 1973 energy crisis was also affecting demand. Ford needed a small car to compete in this emerging market. After research and many mock-ups, a prototype and project known as "Bobcat" was created, which would be the basis of Ford's new car. The original plans for the "Bobcat" specified a desire that the new car cost US$100 less to produce than the Ford Escort.

The short listed names for the new car designed by the project Bobcat team were Amigo, Bambi, Bebe, Bravo, Bolero, Cherie, Tempo, Chico, Fiesta, Forito, Metro, Pony and Sierra. Despite more board votes for "Bravo", Henry Ford II personally overruled and named the car "Fiesta". The name "Fiesta" belonged to General Motors at the time, however it was freely given for Ford to use on their new class B car. After years of speculation by the motor press about Ford's new car, it was unveiled in late 1975.

The Fiesta Mark I was launched in Europe in 1976. It was a breakthrough for Ford as it was their first truly successful front-wheel drive car. The Fiesta was a runaway success overnight, and the one millionth Fiesta was produced on January 9, 1979.

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