Page last updated at 23:08 GMT, Monday, 30 June 2008 00:08 UK

Chrysler cuts minivan production

Chrysler minivans for sale
Chrysler's sales were 25% down in May

Chrysler has announced plans to cut its production of minivans in the US as rising fuel costs have pushed consumers to switch to smaller vehicles.

One plant in St Louis will close and another will go from two shifts to one, affecting 2,400 jobs.

Rivals Ford and General Motors have also announced plans to make fewer larger vehicles.

Higher running costs have caused sales of minivans, trucks and sports utility vehicles to fall significantly.

"The market is fairly slow and consumer confidence has been down," said Jim Press, Chrysler's president.

"If we want to meet our financial targets, it is important to match our production to demand," he said.

Sales of Chrysler vehicles in the US were down 25% in May. Earlier this month, Ford said it expected to make a loss this year and revealed plans to cut the production of trucks and large sports utility vehicles (SUVs) in favour of more fuel efficient models.

General Motors (GM) also said it was closing four SUV and truck factories in the US, Canada and Mexico in response to falling demand.

GM's shares fell to their lowest level since 1954 on Monday after oil hit another record high price and investors feared this would further depress vehicle sales.

Its shares fell as low as $10.57 on Monday, before recovering to close at $11.50, down 4%.


SEE ALSO
Ford 'to make fewer big vehicles'
20 Jun 08 |  Business
GM axes four SUV and truck plants
03 Jun 08 |  Business
Detroit's desperate struggle
13 Jan 08 |  Business
Chrysler to cut 10,000 more jobs
07 Jul 08 |  Business

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