LONDON (ShareCast) - Shares in the Ford Motor Company slumped Friday as the USA’s number two vehicle producer conceded it would not make a profit this year.

Slackening demand for high-margin fuel-guzzling trucks and sports utility vehicles (SUVs) has hit Ford’s bottom line, prompting the company to cut production levels of trucks while upping the number of small cars it manufactures.

For the industry as a whole, Ford now expects 14.7m to 15.2m units to be shifted in the USA in 2008, down from 15m to 15.4m units previously.

"As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industry-wide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades," said Ford President and CEO Alan Mulally.

Ford will cut its third quarter production to 475,000 vehicles, down 50,000 on previously indicated levels, while the fourth-quarter production targets have been trimmed by 40,000 to a range running from 550,000 to 590,000.

Reductions in output will be achieved through additional down-time, shift reductions and line-speed actions at its large truck and SUV assembly plants, the company said.

Hand in hand with the lowering of demand for Ford vehicles in the US, the company’s credit unit is also seeing a downturn in business and is not expected to make a distribution payment to the parent company in 2008.

Yesterday billionaire financier Kirk Kerkorian announced that his investment company, Tracinda, had increased its stake in Ford to 6.49%.

Tracinda reiterated its previous indications that it is willing to discuss the possible infusion of additional capital into the struggling motor manufacturer.

• News Channel