LONDON (ShareCast) - Ford Motor lost a colossal $8.7bn in the last three months it revealed today, alongside plans to overhaul its product range to focus on smaller, more fuel-efficient passenger cars.

"Because of deteriorating economic conditions, demand has declined dramatically, especially in North America," said chief executive Alan Mulally.

The loss of $8.7bn, or $3.88 per share, in the second quarter, included asset write-downs of $8bn on its Ford North America ($5.3bn) and its Ford Credit lease portfolio ($2.1bn). Ignoring these, losses were $1.4bn. This time last year Ford turned a profit of $750m. Revenue fell to $38.6bn from $44.2bn a year earlier.

By region, the North American operations lost $1.3bn, up from a $270m loss a year but Ford Europe doubled pre-tax earnings to $582m from $262m and South America grew its contribution to $388m from $255m.

Mulally said Ford will bring six smaller more fuel-efficient across from Europe to boost its North American range with three existing truck and SUV assembly plants switched to making small cars.

The move away from petrol-guzzling pick-up trucks and 4-by-4s was designed to respond “to the rapidly changing business environment,” he said. In addition, Ford aims to reduce its workforce by 15% to save $5bn annually with more costs saving initiatives earmarked for later on.

• News Channel