UPDATE 2-Ford CEO says U.S. economy a concern

(Adds comments on asset sales and byline)

By Jui Chakravorty

DETROIT, Jan 8 (Reuters) - Ford Motor Co.(F.N) Chief Executive Alan Mulally said on Tuesday that the U.S. economy is "clearly a concern" and the automaker will cut production as needed if market demand for vehicles weakened.

"For us, any slowdown in the economy -- the housing industry, financing of vehicles, tightening of credit, housing starts -- it puts a lot of pressure on consumer confidence to buy big-ticket items," Mulally told reporters at a dinner ahead of the North American International Auto Show.

Ford has forecast that U.S. demand for light trucks and cars could dip below 15.5 million units on an annualized basis over the next six months.

In 2007, U.S. sales dropped almost 3 percent to 16.14 million vehicles, the lowest since 1998 and down from 16.55 million a year earlier.

"A lot of people are concerned about the value of the dollar," Mulally said. "People are concerned about the U.S. economy."

In wide-ranging remarks, Mulally said he expects the sale of the automaker's Land Rover and Jaguar luxury brands to be completed by the end of the first quarter.

Ford last week selected Tata Motors Ltd (TAMO.BO) as the front-runner to buy Jaguar and Land Rover.

Mulally, who left Boeing Co.(BA.N) to take the top job at Ford just over a year ago, said he does not see any further asset sales in 2008.

"Our highest priority is to integrate Ford and leverage assets worldwide," Mulally said. "We haven't seen any opportunity (in mergers and acquisitions) that would add more value to Ford."

The U.S. automaker, which lost $12.6 billion in 2006, is in the midst of a multiyear restructuring that aims to return its money-losing North American operations to profitability in 2009.

Ford President of North America Mark Fields said earlier on Tuesday that the automaker was on track to achieve that profitability target.

Fields also said the automaker is in talks with the United Auto Workers union on another round of worker buyouts and early retirement offers and expects to make an announcement in the first quarter. (Reporting by Jui Chakravorty; Writing by Poornima Gupta; Editing by Gary Hill and Carol Bishopric)