Bankruptcy

Financial Crisis Continues to Affect Automotive Industry

By J. Michael McBride

This October, the automotive industry experienced its worst month of sales in over twenty five years. Leading the charge into the abyss are General Motors, with a sales plunge of 45%, and Ford, with a sales plunge of 30%. Not far behind, Toyota and Honda are also on track for an October sales plunge of 23% and 35%, respectively.

Ford’s senior economist, Emily Kolinski Morris, believes that sales have plunged “because automobiles are more durable, people can wait without buying a new vehicle until they feel more confident in the economy.” To help combat a steep drop in sales during the month of September, Toyota launched a zero-percent financing campaign. However, General Motors has been forced to tighten its lending standards due to the increased risk created by the financial crisis, thereby perhaps shutting out some potential buyers. Nonetheless, the continued bleak financial outlook will only serve to worsen the automaker’s woes. According to Ford’s senior economist, “‘The answer to when we start to come out of that trough lies in when the economy comes out of that trough.’”

Here is the link to the article:
http://biz.yahoo.com/ap/081103/auto_sales.html

Chris

Full post as published by Texas Lawyer Blog on November 03, 2008 (boomark / email).