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The Global Recession And Financial Crisis Continue To Strangle Auto Manufacturers

Monday, 05 January 2009 20:01:33 GMT

Written by John Kicklighter, Currency Analyst

Sales figures from auto manufacturers in the US have shown the need for government aid in recently released sales figures. According to today's number General Motor's (GM) December sales tumbled 31 percent to a 49-year low - suggesting that fears that the firm may collapse are adding to the basic economic influence of a frugal consumer base. Looking at other producers, the global recession and lack of credit are certainly having their way with sales activity. Chrysler's sales last month dropped an astounding 53 percent and Ford Motor Co.'s sales were down 32 percent. A contraction in the vital US market is also exacting a contraction on foreign producers. Toyota Motor's deliveries fell 37 percent while Honda Motor sales were curbed 35 percent. If figures like these continue, the US government's bailout efforts may fall well short of the basic need to keep these firms solvent. And, should this sector fail, it could easily send the world's largest economy to a far deeper recession than policy officials and Americans are ready to consider.

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