Codenamed "Erika", the third generation Escort was launched in September 1980. The code name alluded to the leader of the product planning team, Erick A. Reickert. The North American Escort introduced at this time was a derivative. The two vehicles were intended to share component designs, but separate engineering organizations and government regulations made this impractical.
The Mk III was intended to be a hi-tech, high-efficiency design which would compete with the Volkswagen Golf, and indeed the car was launched with the advertising tagline "Simple is Efficient". The Mk III was a radical departure from the two previous models, the biggest changes being the adoption of front wheel drive, and the new hatchback body, which introduced trademark styling cues which would be later seen in the forthcoming Sierra and Scorpio, most notably the "Aeroback" rear end - the "sawn off" bootlid stump which was proved to reduce the car’s drag coefficient. Also new were the overhead camshaft CVH engines in 1.3 L and 1.6 L formats, with the Valencia engine from the Fiesta powering the 1.1 L derivative. The suspension was fully independent all around, departing from the archaic leaf spring arrangement found on its predecessors. The Escort Mk III was voted European Car of the Year in 1981. From launch, the car was available in Base (Popular), L, GL, Ghia and XR3 trim.
However, the car attracted criticism from the motoring press at launch due to how its suspension was set up - with positive camber on the front wheels and negative camber at the rear, giving rise to the Mk III’s infamous "knock-kneed" stance. Although this gave the car acceptable handling on perfectly smooth roads, once the car was tested on bumpy British roads the effects of this decision was obvious and the Mk III soon had a reputation for a harsh, unforgiving ride, with questionable handling. The shock absorber specification was to blame also, and it was not until 1983 that the suspension gremlins were finally ironed out. A three-speed automatic transmission was available on the 1.6 engine within a couple of years of the car’s launch. From mid-1982, a 5-speed manual gearbox was introduced across the range. This was now standard on the 1.6L versions and could be specified as an option on most 1.3L engines.
In order to compete with Volkswagen’s Golf GTI, a hot hatch version of the Mk III was created from the outset - the XR3. Initially this featured a tuned version of the 1.6 L CVH engine fitted with a Weber carburetor, updated suspension and numerous cosmetic alterations. Despite the initial lack of a 5-speed transmission and the absence of fuel injection, the XR3 instantly caught the public’s imagination and became a cult car which was beloved of "boy racers" in the 1980s. Fuel injection finally arrived in 1983 (creating the XR3i), along with the racetrack-influenced RS1600i. The final performance update arrived in the form of the turbocharged RS Turbo model in 1985.
Another engine introduced around the same time was the 1.6L Diesel engine. Developed in Dagenham, it was remarkably economical for its time, managing over 70 miles per Gallon. It was available on the L and GL models. However, the performance was not so impressive, with only 54Bhp and a top speed of barely 90 mph.
The Escort estate was initially only available with three doors, but a five-door version was eventually introduced in 1983. In that year, a saloon version of the Escort, the Orion, was launched. It used the same mechanicals as the hatchback, but had a more up-market image and was not available with the rather underpowered 1.1 L engine. The Orion name would continue in use through until 1993, when it was dropped and the Orion simply called "Escort".
A convertible version, courtesy of coachbuilder Karmann appeared in the same year, significant as it was the first drop-top car produced by Ford Europe since the Corsair of the ’60s. The Escort Cabriolet was initially available in both XR3i and Ghia specification, but the Ghia variant was dropped after a couple of years.
A pickup version of the Escort, the Bantam, was produced in South Africa, while Brazil had a two-door sedan known as the Verona.
The Escort received another facelift in early 1986. Codenamed within Ford as Erika–86, and sometimes referred to as the "Mk IV" (although it was not officially the fourth generation), it was instantly recognizable as an updated version of the previous model, with a smooth Scorpio style nose and the "stroked" rear lamp clusters smoothed over. New features included an optional mechanical anti‐lock braking system (standard on RS Turbo models) and the option of a heated windshield – features which were at the time unheard of on a car of this size and price. The trim designations were carried over from the pre-facelift car.
Trim designations for the Escort Mk 4
Popular: 1.1l or 1.3l
L: 1.3l, 1.4l and 1.6l
GL: 1.4l or 1.6l petrol engine or the 1.6l diesel engine
As well as an all-new interior, a new 1.4 L derivative of the CVH engine was introduced, as well as numerous suspension tweaks to address the long standing criticisms of the Escort’s handling and ride quality, although these had limited success. A new LX version was introduced in 1987 in order to bridge the gap between the L and GL models. In 1989, the diesel engine was enlarged to 1.8 L, and the poorly‐performing 1.1 L version was finally dropped from the range.
The Orion was also proving popular with the motoring public, and Ford also gave the Escort‐based saloon a similar makeover. Carried over from the previous range was the 3–speed automatic which was ultimately replaced late in the production run with a variant of the CTX step less gearbox as first used in the Fiesta a couple of years earlier.
At this time, the Escort was dropped in South Africa and replaced by the Laser and Meteor, although the Escort‐based Bantam pickup remained in production, facelifted, and also sold as a Mazda Rustler.
This Escort continued production until 1995 in some foreign markets, especially Latin America.