Ford Motor Co. executives recently retreated from their profitability outlook for 2009. In addition, they announced their drastic plans of production cuts.
The reason for all the sudden moves would be the fact that Ford Executives expect fuel prices to rise as much as $4.25 per gallon.
The tipping point that prompted a huge demand shift from large vehicles to cars, according to Ford CEO Alan Mulally, was when fuel prices reached $3.50 per gallon. With fuel prices expected to climb further, the era of trucks and SUVs may just have passed. For a company that has made much of its profit from pickup trucks (the Ford F-Series Pickup had been the best selling car for years), the sudden shift in demand can truly be felt.
Ford is now changing its production to accomodate a market more concerned with practicality. The company, therefore, is set to produce lesser trucks and way more cars: something that mimics the line up of Asian car manufacturers.
In simple terms, Ford is trying to keep up with the times. The challenge for the company is to be able to change its concept as quickly as possible to appeal to more budget conscious car buyers.
The reason for all the sudden moves would be the fact that Ford Executives expect fuel prices to rise as much as $4.25 per gallon.
The tipping point that prompted a huge demand shift from large vehicles to cars, according to Ford CEO Alan Mulally, was when fuel prices reached $3.50 per gallon. With fuel prices expected to climb further, the era of trucks and SUVs may just have passed. For a company that has made much of its profit from pickup trucks (the Ford F-Series Pickup had been the best selling car for years), the sudden shift in demand can truly be felt.
Ford is now changing its production to accomodate a market more concerned with practicality. The company, therefore, is set to produce lesser trucks and way more cars: something that mimics the line up of Asian car manufacturers.
In simple terms, Ford is trying to keep up with the times. The challenge for the company is to be able to change its concept as quickly as possible to appeal to more budget conscious car buyers.
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