Ford Motor Company this morning announced that it will further cut production levels of its vehicles, citing soaring gas prices as consumers shift away from large trucks and SUVs.

Ford will now be producing 690,000 vehicles for the remainder of the second quarter. That's down 20,000 units from its previous estimate - which was already a reduced number - and 15% below Q2 of last year.

Production levels for 3Q08 will fall to between 510-540,000 units, down about 15-20% the same period last year, and between 590-630,000 units in 3Q08 - down 2-8% from 4Q07.

While the Blue Oval will be producing fewer units overall, the company will increase production of cars and cross-overs like the Focus, Edge and Escape, Mercury Milan and Mariner, and Lincoln MKZ and MKX. Production of trucks and SUVs will drop sharply.

Ford also said it is planning further manufacturing capacity realignments, as it accelerates the introduction of more fuel-efficient small cars and crossovers.

Here's a thought for Sirius:
While fuel prices are obviously top-of-mind for consumers, why not run an ad campaign highlighting Sirius Travel Link? The ability to see nearby gas stations sorted by price and distance from over 120,000 locations nationwide is pretty noteworthy.

[AutoBlog]

Sirius Canada has snagged themselves a long-term exclusive agreement with Kia Canada.

Kia and Sirius are have already had a long-term agreement here in the States. It runs through 2014 with an option to extend to 2017. The terms of the Sirius Canada agreement were not announced.

The partnership, which begins next month, will make Sirius Satellite Radio a factory-installed option for most Kia vehicles sold in Canada, including the all-new 2009 Kia Borrego mid-size SUV.

All Sirius-equipped Kia vehicles will include a 3-month Sirius subscription.

Despite falling U.S. auto sales, XM Satellite Radio delivered the highest number of vehicle based subscriptions in satellite radio history, said CEO Nate Davis during yesterday's earnings call.

"Even with the relative softness in the US auto-market, XM delivered the largest number of OEM growth additions in the history of satellite radio," Davis said.

XM had over 800,000 gross OEM additions and roughly a million factory installed XM radios manufactured and delivered to dealers in the quarter, Davis told investors. "That is a 48% year-over-year quarterly increase."

XM ended the quarter 355,000 net subscriber additions from the OEM channel, while Sirius brought in over 321,000 net subscribers from the automotive channel.

Still, XM had a net loss of 51,000 subscribers from the Retail channel, while Sirius squeaked out just over an additional 2,500 subscribers from Retail

Davis explained that while the company had successfully increased direct retail sales to their website and call centers, those increases did not offset "the continuing decline in overall retail sales through the big box retailers."

"However, offsetting this retail weakness... is a continued acceleration of our OEM growth," said the CEO. "XM 2008 installations could well exceed 4 million units close to the long range estimate we provided a number of year's ago."

[Transcript via SeekingAlpha]

Microsoft Corp. and Hyundai-Kia Automotive Group have partnered together to build a music and information system to rival Ford Motor Co.'s SYNC system. The system is set to debut in cars sold in North America in 2010.

Hyundai is the first major Asian automaker to commit to using the Microsoft Auto platform with the goal of bringing these systems worldwide.

The infotainment systems will be a voice-controlled interface linking mobile devices to car stereo systems, with the ability for new functionality through software updates via the USB port - much like Ford SYNC. Later versions are expected to include multimedia and navigation-related features, said Microsoft/Hyundai.

Hyundai-Kia will first introduce vehicles in North America in 2010 and expand to the Asian and European regions shortly afterwards.

As I predicted, this is only the beginning. The product deal marks a win for Microsoft and you can bet that we will see more of these partnerships with other automakers in the future. Microsoft Auto systems - which are essentially mini-PCs - are currently available in Fiat in Europe and South America, and in Ford in North America.

With automakers like BMW and Chrysler working to bring Internet access to vehicles, the market for car-based information and data systems is expected grow rapidly in coming years, and Microsoft plans to be part of this movement.

U.S. auto sales fell sharply in April, leading some automakers to suggest that industry-wide annual sales could fall to the lowest levels in more than a decade and a half.

General Motors posted an incredible 23 percent decline in sales, led by a 32 percent decline in truck sales. Sales for Ford Motor Co dropped 19 percent, which included an 18 percent decline in truck sales.

Toyota Motor Corp saw sales fall nearly 5 percent on sharp drops in SUVs and pickup trucks. Nissan reported a 1.6 percent overall decrease in April U.S. auto sales. Honda and Chrysler are expected to post sales data later today.

GM and Ford said preliminary data suggested industry-wide sales had fallen below 15 million units on an annualized basis, which would mark the weakest result in more than a decade and a half, according to Reuters.

Rising gasoline prices weighed hardest on sales of large SUVs and trucks, creating a market shift toward cars - a trend that tends to favor Japanese car makers.
 

"Smaller vehicles are going over big," said Toyota U.S. sales chief Jim Lentz. "With oil prices at record levels, compact cars and hybrids continue to lead the way."

The trend towards smaller vehicles could impact the conversion rate for satellite radio, though it remains unclear if this is truly the case.

"The more SUVs you have, the more high-end cars you have, the higher the conversion rate," said XM Satellite Radio CEO Nate Davis to analysts in late February. "The lower, the low-end cars, the less [the conversion rate] is."

[Reuters]