US car manufacturers General Motors, Ford and Chrysler have not yet found the market levels they say they need to end losses and may require deeper restructuring and more federal money to survive.
"The straight truth is there's no sign of a bottom," said Jim Hossack, an auto industry analyst at AutoPacific in Tustin, California.
"How far down is the bottom, when is it, what does it look like? No man alive knows, and we thought we did." US industry wide deliveries in January tumbled 37 per cent to 656,976 as the recession ravaged demand.
That translates into an annual rate of 9.6 million, and the fourth month of a rate of less than 10.7 million, after an average of more than 16 million vehicles in this decade, research firm Autodata said.
An uncertain auto sales outlook complicates plans for GM and Chrysler to meet a February 17th deadline to prove they are viable and keep $17.4 billion in US loans they need to avoid bankruptcy.
It also increases the likelihood Ford, which has shunned the government handouts, will need to ask for aid.
January sales plunged 55 per cent at Chrysler; 49 per cent at GM, the largest US automaker; and 40 per cent at Ford. Toyota Motor dropped 32 per cent, Honda Motor fell 28 per cent and Nissan Motor was down 30 per cent.
The three US-based automakers "can't survive if these rates continue," said Jesse Toprak, director of industry analysis for auto-research firm Edmunds.com in Santa Monica, California, said in a conference call last night.
"But not just the big three. All automakers are going to suffer if this continues."
Unit sales across the US for the month were the fewest since December 1981, while the annualized sales rate was the lowest since June 1982, according to Woodcliff Lake, New Jersey- based Autodata.
Bloomberg