Auto sales drop to 26-year low
The auto sales in the US has plunged to 37 per cent last November; their worst in over 26 years. This has dashed all expectations for the demand in vehicles. Every major automaker has reported a year-over-year sales decline amounting to approximately 30 percent in the beginning of the week. The Detroit carmakers were among the worst hit, with GM’s U.S. sales falling 41 percent and Chrysler LLC’s dropping to almost 47 percent. Toyota’s sales too tumbled down 34 percent, while Nissan’s dropped 42 percent and Honda’s fell by 32 percent.
Automakers and analysts are blaming the crumbling economy, that allows lesser access to vehicle financing, and a wait-and-see approach among consumers more preoccupied with the value of their homes and the fate of their jobs than the lure of a new car.
In such a situation GM will need to make at least $4 billion this month and a total of as much as $18 billion to keep it up and running, while Chrysler will probably take a loan of $7 billion by this year’s end.
