Don't be surprised to see the Big Three automakers lower production forecasts for the rest of the year in light of soaring gasoline prices, slowing economic growth, and the sorry state of affairs in the automobile industry.

Investors already expect General Motors Corp., Ford Motor Co. and DaimlerChrysler to report major drops in sales for July when they report on Tuesday, thanks mostly to tough comparisons with heady sales last year at the height of the discount pricing bonanza.

Given Ford and GM have already reported quarterly results, the most closely watched headline in the reports on Tuesday will be the production updates.

Investors said a modest production cut would not roil markets, given that economic forecasts for the second half of the year make vehicle purchases less likely and rising inventories at the automakers more likely.

Wages are not going up, and gas prices are higher, said A.G. Edwards & Co. senior equity strategist Scott Wren in St. Louis. The mentality people have is to not be buying any big items like that right now. I don't think it would surprise the market if production numbers were lowered.

The U.S. government said last week that the average retail gasoline price rose past $3 a gallon, the second-highest pump price ever. Prices are now close to the record $3.07 hit last September, when Hurricane Katrina disrupted fuel supplies.

At the same time, economic expansion slowed abruptly in the second quarter, growing at only a 2.5 percent annualized rate, less than half the pace at the start of the year.

A decline in sales prompted Ford last week to cut its third-quarter production target in North America, mostly in the truck sector, by 5.6 percent to 670,000 vehicles.

Analysts with Calyon Securities do not expect a material change in third-quarter production estimates from GM, but said select programs are at risk, given high inventory levels, according to a research note.

Michigan-based auto companies are searching for a level of incentives that keeps revenue per car sold reasonably high, but the incentives are not so meager as to result in a sizable buildup of unsold cars, said Comerica Bank chief economist Dana Johnson, in Ann Arbor, Michigan.

If the automakers really misjudged demand by a serious degree, that will force them to adjust how much production they might have to do for the rest of the year, Johnson said.

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