Sales plunge for GM and Ford
http://tinyurl.com/47kny2

NEW YORK (CNNMoney.com) -- Sales at General Motors and Ford Motor Co.
fell sharply in September as tighter credit for buyers and dealers
during the month combined with stubbornly high fuel prices to sharply
curtail demand for cars and trucks.

General Motors (GM, Fortune 500) reported that sales of cars and light
trucks dropped 16% compared to September a year ago. That was better
than the forecast of a 24% decline from sales tracker Edmunds.com but it
is still clearly a sign of weakened demand for autos. Sales of GM's cars
fell 10% while sales of light trucks, such as pickups, SUVs and vans,
declined 19%

The news was worse at Ford (F, Fortune 500), which reported that U.S.
sales tumbled 35% from a year earlier. The forecast had been for only a
25% drop in sales in the period.

Overall industry sales are expected to fall 20% from year-ago levels.
Experts said many consumers were apparently reluctant to make big ticket
purchases at a time of economic upheaval.

And for those who wanted to buy a car, some were unable to get a loan as
the credit markets tightened during the mounting crisis on Wall Street.

In addition to auto loans being more difficult to get, a growing number
of dealerships also have been hit by the credit crunch and have found it
increasingly tough to get the cash they need to do business.

"Consumers and businesses are in a very fragile place," said Jim Farley,
Ford group vice president. "An already weak economy compounded by very
tight credit conditions has created an atmosphere of caution."

George Pipas, Ford's director of sales analysis, said the company is
projecting that industrywide sales to consumers were down 30% compared
to last year.

If that pans out, total U.S. vehicle sales would fall below the 1
million mark for the first time in 15 years. He said that sales, as well
as traffic in showrooms, were down even more sharply the last 10 days of
the month as the economic crisis got more and more attention.

"There are customers who are adopting a wait and see attitude," he said.
"When the Dow falls 777 points, I can assure you there weren't many
people closing on a car on Monday or an HD TV or a home for that matter."

Market research firm CNW Research, which has tracked dealership traffic
for 22 years, confirmed Pipas' view. The firm's reading on traffic for
the end of September was the worst it has ever reported, down 50%
compared to a year earlier.

"Manufacturer incentives aren't pulling in the crowds. Dealer 'blow out
sales' aren't working. And without showroom traffic, it's tough to sell
anything," said Art Spinella, president of CNW.

But the sales decline for Ford in September was broad based. Sales for
almost every model of car or truck offered by Ford, Lincoln, Mercury and
Volvo fell at least 10% from the same period last year.

Ford's SUV models plunged 57%, while pickup and van sales tumbled 39%.
But Ford even had a rough time selling more fuel efficient vehicles.
Sales of so-called crossover vehicles, which are a more car-like SUV,
dropped 30% despite a high-profile introduction of a new model, the
Flex. Sales of car models were down 19%.

The other top automakers are due to report later in the day. Chrysler
LLC sales are forecast to drop by 37%.

But it's not just U.S. automakers that are being hit by the credit
squeeze. Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY) are
expected to post steep declines in U.S. sales as well.


--
Civis Romanus Sum