Ford, General Motors, to cut 2008 production targets

04 December 2007

Auto majors General Motors (GM) and Ford, both of which have been struggling to accomplish turnarounds, said in separate statements on Monday 3 December that they would cut production targets for the first quarter of 2008 because of slowing sales.

GM expects to produce 950,000 vehicles from January to March, down 11 per cent from the same period in 2007. Ford plans to build 685,000 vehicles in the first quarter, a 7 per cent decline. A Ford representative said that the automaker would continue to adjust its production according to market demand in what appears to be a economy and.

GM's sales had increased in the three previous months, and the company said November numbers were low owing to a cutback of sales to rental car companies, as well as lower inventories of full-size trucks and sport utility vehicles (SUVs). It said newer models like the Cadillac CTS and the Chevrolet Malibu sedans were selling better than expected.

For the second time this year, Detroit accounted for less than half of the United States automobile market in November. GM, which had fared the best of the three big Detroit automakers, has seen sales drop 10.9 per cent in November. Chrysler's sales declined by 2.1 per cent, with drastically lower truck sales overturning an impressive 43 per cent rise in passenger car sales.

Of the three, only Ford managed a 1.3 per cent increase after 12 consecutive monthly sales declines. But this was because of increased lower-profit bulk sales to government and private sector fleet operators. Ford's dealership sales were down 3 per cent in November.

In sharp contrast, all the three major Japanese automakers increased sales during November, reporting their highest sales ever for the month. The pathetic performance of American automakers is being ascribed to their heavy dependence on gas guzzling truck and SUV sales, which have taken a huge beating since oil prices hit record highs.