Ford will cease to have a factory presence in the World Rally Championship at the end of the 2012 season.
A statement issued by Ford of Europe on Monday said that the decision had been taken due to the current economic climate, following a major review of its marketing activities in the continent.
"Ford has a long and proud history in the WRC and this was not an easy decision," said Roelant de Waard, vice president, Marketing, Sales and Service, Ford of Europe. "At this time, however, we determined that it was better for the company and the Ford brand to reduce our commitment to the WRC and deploy our resources in other areas."
Malcolm Wilson's M-Sport organization, which has run Ford's factory squad since 1997 and taken 52 wins plus the manufacturers' world championships in 2006 and '07, aims to continue in the WRC with the Fiesta model in the coming years. Ford says it is in talks with M-Sport to provide continued vehicle and engineering support.
Wilson (RIGHT) admits his M-Sport group will need to reviews its options in the wake of Ford's decision. M-Sport has run Ford's factory squad since 1997 and has taken 52 wins, plus the manufacturers' world championships in 2006 and '07.
Wilson pledged to continue developing the Fiesta WRC in preparation for 2013, but said its future race program would have to be reviewed.
"Confirmation of our key championship programs for 2013 is our first priority and a challenge that the team here is very much looking forward to," Wilson said. "After that we can review all options and determine the right direction for the future.
"My intention is that we will continue to push to secure stage wins and overall results on the forthcoming events for Ford and to push forward with the development work that was started in March this year to improve and refine the Fiesta WRC even further, ready for the 2013 season.
"We will also continue to work closely with our colleagues at Ford Racing toward the launch of the Fiesta R5 for March 2013 and the improvements that we are working on for the R2 car which will continue to the form the basis of a series of national and regional young driver programs in the future."
Wilson paid tribute to Ford' role in a partnership that has spanned 16 seasons, and said he sympathized with the company's decision.
"M-Sport is extremely proud of our history with Ford since 1997," he added. "208 podium finishes, scoring points on 156 consecutive events and 52 wins from 225 starts in the WRC along with two world titles underlines the dedication and commitment of the whole team in Cumbria.
"I would like to thank Ford of Europe for their enthusiastic support and the faith shown in the team over the past 16 seasons. We understand that tough decisions have had to be made to safeguard Ford jobs, we accept the commercial reality of the situation and look forward to continuing our strong technical partnership into the future."