Jan. 4 (Bloomberg) -- Ford Motor Co. fell to the lowest price since 1986 in New York trading after losing its status as the No. 2 seller of autos in the U.S. for the first time in three-quarters of a century.

Ford slid 32 cents, or 5 percent, to $6.13 at 4:01 p.m. in New York Stock Exchange composite trading, a day after posting a 12 percent drop in U.S. sales and forecasting a ``challenging'' 2008. Toyota Motor Corp., which modeled itself on Ford following World War II, has overtaken the Dearborn, Michigan-based automaker on its home turf.

The market value of the 104-year-old company founded by Henry Ford has tumbled to $13 billion from $68 billion in 1998, when Ford sold one of every four new vehicles in the U.S. Three restructuring plans at Ford since 2001 have failed to stem 12 years of plunging market U.S. share, now at 15.8 percent.

``Toyota isn't getting weaker, they're getting stronger,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ``What does that indicate for Ford's future?''

The shares have lost 20 percent in the past year. Today's closing price was the lowest since Jan. 15, 1986, when Ford ended the day at $6.11, according to Bloomberg data. Ford went as low as $6 in today's trading.

Yielding to Toyota

Year-end sales reports yesterday showed Toyota taking the No. 2 U.S. spot held by Ford since 1931. Ford, which hasn't finished third or lower since 1905, also said it expects lower industrywide sales in the first half.

``Implementing the plan we've laid out will create an exciting, viable Ford,'' Chief Executive Officer Alan Mulally told reporters in November. He made the statement when questioned about Ford's survival as an independent company. Mulally continues to say Ford will return to profitability in 2009, following a record $12.6 billion 2006 loss.

``Their volume seems to be in free fall,'' said George Magliano, a New York-based analyst with Global Insight Inc. ``To say `we're happy with what we're doing' -- I wouldn't be happy.''

To lessen its reliance on large pickups and sport-utility vehicles for profit, Ford is adding new wagons such as the Edge and MKX. Still, those models' sales ``continued to be largely offset by weak performance at Ford's traditional trucks,'' Lehman Brothers analyst Brian Johnson in Chicago wrote in a report today.

Pressure on Pickups

``Ford's product pipeline remains a concern,'' Goldman, Sachs & Co. analyst Robert Barry in New York said in a report. He said competitors' pressure ``seems to be increasing'' on the F-Series large pickups, Ford's top seller, which declined 13 percent in 2007.

Ford recruited Mulally because he revamped Boeing Co.'s commercial aircraft business after jet orders evaporated following the Sept. 11 terrorist attacks. U.S. retail gasoline has averaged $2.75 a gallon since he took the top spot at Ford.

The automaker's market value was $15.8 billion when Mulally's hiring was announced on Sept. 5, 2006.

Ford's 7.45 percent note due July 2031 fell 1.2 cents to 72.6 cents on the dollar, yielding 10.7 percent, according to Trace, the NASD's bond-price reporting service. That was the lowest price since November.

Credit-default swap contracts tied to Ford bonds rose 50 basis points to 872.9 basis points, according to CMA Datavision in London. An increase in the contracts, used to bet on a company's ability to repay debt, suggests a decline in investor confidence.

Toyota passed Ford as No. 2 worldwide seller of cars and trucks in 2003. General Motors Corp. is the largest seller of vehicles in the U.S.

To contact the reporter on this story: Bill Koenig in Southfield, Michigan at wkoenig@bloomberg.net;

Last Updated: January 4, 2008 16:27 EST