Ford reported record losses of nearly $9 billion (£4.52 billion) in the second quarter of the year as the slump in the US truck and bigger vehicle market hit the company hard. America's second-biggest motor manufacturer also laid out plans to make small cars an integral part of its US line-up with a transformation of its portfolio and production in North America.

After a dramatic fall in the sales of big vehicles in the US, Ford is writing down the value of its North American assets by $5.3 billion and its credit business by $2.1 billion.

The company is expanding its range of small and fuel-efficient cars by converting three US factories that produce SUVs to make small cars. The shift towards smaller vehicles will also involve bringing six small European models to the US, including the next-generation Focus and Fiesta.

Mark Fields, head of US operations, said: “While we have no intention of giving up our long-time truck leadership, we are creating a new Ford in North America on a foundation of small, fuel-efficient cars and crossovers that will set new standards for quality, fuel economy and refinement.”

Ford's plans to overhaul its American operations follow a shake-up by General Motors, its larger rival. Unlike GM, Ford will not seek to raise more capital. It had $26.6 billion in cash at the end of the second quarter, $2.1 billion less than the same quarter last year. Don Leclair, chief financial officer, said: “We are confident we have enough liquidity.” Ford is losing 15 per cent of its salaried jobs and seeks to cut $5 billion of costs by the year end.

Its poor performance in its US heartland contrasted with better figures from elsewhere in the world. In North America it lost $1.3 billion in the second quarter, compared with a loss of $270 million for the same quarter in 2007. In Europe, where the US group recently sold Jaguar and Land Rover, profits increased to $582 million, from $262 million a year ago.

In Europe Renault has cut its volume estimate by 10 per cent and Daimler said its earnings this year would be above €7 billion (£5.51 billion), against more than €7.7 billion previously.

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