Ford Motor announced on Thursday a more than 9% drop in sales in the United States in the first quarter, as persistent financial pressures are causing consumers to rethink their big purchases.
The rise in financing costs, high prices, and the expiration of federal tax credits for electric vehicles have slowed the demand for new cars in the United States.
Ford’s truck sales fell by 11.3% during the quarter ending in March 31, while SUV sales dropped by 7.8%, reflecting a decrease in showroom traffic across their core lineup.
The automaker’s shares in Dearborn, Michigan, were down 2.5% in the morning amid a general market decline.
Ongoing conflicts in the Middle East continue to weigh on sentiment, as the rise in energy prices due to war strains household budgets.
While fuel price increases generally boost interest in electric vehicles, analysts believe demand for EVs could remain under pressure due to high prices and reduced incentives.
Ford’s electric model sales plummeted by nearly 70% due to declining demand following the end of federal incentives.
Overall auto sales in the United States dropped by 5.3% in the January-March period compared to the previous year, according to research firm Omdia. Ford’s competitors, General Motors and Toyota, also reported sales declines on Wednesday.
Financial accessibility concerns have led buyers to opt for more affordable entry-level versions, prompting automakers to expand the availability of value models.
Combined sales of Ford’s entry-level versions like the Maverick, Ranger, and Bronco Sport increased by 8.4% during the quarter.
Ford’s total sales for the quarter fell to 457,315 vehicles, down from 501,291 a year ago.
