Gas prices are causing consumers to shun pickups and SUVs, leading to losses at the car maker's North American auto unit.
Ford Motor Co. executives say they believe that $4 gas is here to stay, resulting in a fundamental consumer shift away from gas-guzzling SUVs and pickups and causing continued losses at its core North American auto unit.
The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009. And that expectation prompted the nation's No. 3 automaker to announce deep production cuts for what has been its best selling and most profitable vehicles for several decades and could lead to more plant closings and job cuts down the road.
"We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally. "It seems to us we reached a tipping point."
Ford now believes that the change in vehicle choice is structural, not cyclical, Mulally said. Ford reduced its forecast for industrywide sales and said its own market share will now be about 14% of retail sales, at the low end of its earlier forecast. Read full story on this site.
source: cnnmoney.com
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