CHICAGO (AP) _ A Deutsche Bank Securities analyst cut his investment rating on Ford Motor Co. Monday on concerns that rising interest rates may hurt the No. 2 automaker's profits.

Both automakers and their moneymaking finance units are sensitive to rising rates, Deutsche Bank analyst Rod Lache said in a note to investors explaining why he cut Dearborn, Mich.-based Ford to ``sell'' from ``hold.''

For Ford Credit, each 0.1 percentage point increase in rates should cut profits by $153 million, or 5 cents share, Lache wrote.

Ford's shares changed hands at $14.11 in midday New York Stock Exchange trading, down 43 cents, or 3 percent.

Low interest rates have fueled the recent boom in auto sales with cheap loan financing, the analyst wrote. Automakers will likely continue to offer incentives to buyers to keep sales volume up, Lache wrote, but he expects ``flattish'' auto demand and production this year.

In addition, Ford's 2003 earnings performance ``weakened our confidence'' in exceeding Wall Street's earnings expectations for 2004, Lache said.

U.S. auto stocks have declined in two of the past three periods of interest rate tightening, according to Lache. The only time stocks remained strong was when pent-up demand boosted sales in the early 1980s, which he doesn't expect will be the case this year.

Lache lowered his 12-month price target on Ford shares to $12 from $13.50.