Ford Slashes '07 Production

Ford Motor Co. is expected to build fewer vehicles in its 2007 lineup. This is due to its reduction of sales to rental companies. Further, analysts in the automotive industry are anticipating that Ford fanatics will be making fewer orders in the coming years.

According to the automaker, it will slash its production of new vehicles in North America. As announced, Ford's car and truck production will be reduced by 8 to 12 percent. These sweeping reductions will take effect in the first half of 2007. Nonetheless, Ford will increase its production by 5 to 10 percent in the 2nd half of said year.

This year, Ford made a striking 21 percent cut on production in the first quarter. The reduction eventually triggered temporary plant layoffs in several Ford plants. The automaker's spokesman did not release any additional forecasts about the matter. Suris stated that Ford is not making an official announcement of its production forecast. The latter can be used to track down sales

Nevertheless, analysts are saying that the rebound production on the second half of 2007 might be deceiving. David Healy, an automotive analyst with Burnham Securities, predicts that the automaker will cut its North America production by 9% in 2007. He also noted that the rebound anticipated on the second half of the year is "a misleading improvement" because of the ongoing production cuts this year.

Healy also anticipates that a huge slice of production cut would be for models like Taurus and Freestyle. These vehicles are significantly sold to rental car companies. Healy also added that it is necessary for Ford to make timely production cut due to the chaos in the retail market. This includes sales at dealership and not to discounted fleet sales to rental companies and government as well.

Taurus is a midsize front wheel drive car introduced in December 1985 as the replacement of Fairmont-based rear wheel drive LTD model. The excellence of Ford Taurus car parts has astounded the industry for several decades now. As a fact, in over 20 years of production, Ford has sold about 7 million Taurus units. Ford Freestyle, on one hand, is a crossover SUV or station wagon that was introduced for the 2005 lineup. It is designed to compete with midsize vehicles like Honda Pilot, Toyota Highlander, Mitsubishi Endeavor and Nissan Murano.

"The company is bottoming out now and will continue at a low market share for the full year," Healy concluded.