Ford Motor announced Thursday a 9% drop in sales in the United States in the first quarter, as persistent financial pressures are causing consumers to rethink major purchases.
Rising financing costs, high prices, and the expiration of federal tax credits for electric vehicles have slowed demand for new cars in the United States.
Ford’s truck sales fell by 11.3% in the quarter ending on March 31, while SUVs dropped by 7.8%, reflecting a decline in showroom traffic for their core lineup.
The automaker’s shares were down 2.5% in the morning amidst a general market decline.
Ongoing conflict in the Middle East continued to weigh on sentiment as rising energy prices from the war strain household budgets.
Although high fuel prices usually drive interest in electric vehicles, analysts believe demand for EVs could remain under pressure due to high prices and reduced incentives.
Ford’s electric models saw a drop of nearly 70% in sales due to decreased demand after federal incentives disappeared.
Overall car sales in the United States dropped by 5.3% from January to March compared to the previous year, according to research firm Omdia. Ford’s competitors, General Motors and Toyota, also reported sales declines.
Financial constraints have led buyers to opt for more affordable entry-level versions, prompting automakers to expand the availability of value offerings.
Combined sales of Ford’s entry-level versions like Maverick, Ranger, and Bronco Sport increased by 8.4% during the quarter.
Ford’s total sales fell to 457,315 vehicles for the quarter, compared to 501,291 a year earlier.
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