DETROIT -- Ford Motor Co. executives realized in just the past couple days that they would miss their profit goals, CEO Alan Mulally said Thursday night.
Speaking to reporters after an industry dinner here, Mulally said sales data from the first half of May convinced him the U.S. industry is going through a shift in vehicle preference that is more dramatic and permanent than previously projected. Gasoline costing more than $3.50 a gallon drove the accelerated move from trucks to cars, Mulally said.
It appears to us that fuel prices are not going to come down, the former Boeing Co. executive said. You just cannot make cars that people dont want.
Fords bearish news today comes just four weeks after the automaker reaffirmed its 2009 profit goal and announced a $100 million profit for the first quarter of 2008.
But Ford discovered U.S. pickup truck sales dropped from about 11 percent of the industry's retail sales in April to 9 percent during the first two weeks of May, Mulally said. That is down from 13 percent in the first quarter and 14.1 percent in 2007.
Sales of SUVs dropped from 5.2 percent of the retail industry in April to 4.4 percent during the first two weeks of May. That is down from 6.8 percent in the first quarter and 8.4 percent in 2007, according to Ford.
The segment shifts "really started to move" when gasoline prices hit $3.50 a gallon, Mulally said.
"It seemed to us that we reached a tipping point where customers began shifting away from these vehicles at an accelerated rate," Mulally said earlier Thursday. "Based on everything we can see on the outlook for fuel prices, we do not anticipate a rapid turnaround in business conditions."
With gasoline now hovering at $4 a gallon, Ford revised its plan immediately. Ford now plans for U.S. gasoline prices to range from $3.75 to $4.25 a gallon throughout 2008 and in 2009.
According to AAA, of Heathrow, Fla., regular unleaded gasoline averaged $3.83 a gallon across the country, up 32 cents from a month ago.
Craig Trudell contributed to this report