This year has been tough on the auto industry worldwide, for the most part due to rising fuel prices. The North American
automobile industry has been especially hit.
The biggest buzz seems to have sprung form the Meryl Lynch report, and the idea that they couldn't rule out bankruptcy for the world's largest automobile manufacturer, General Motors. At the same time the company's stocks fell to a 54-year low. And all of it ocurred at a time when GM reported uninspiring sales figures (i.e. 265,937) in June this year.
In order to avoid bankruptcy, GM would need to raise $15 billion in cash as has been said. While the company hasn't responded to the report, but it thinks that it's got enough cash for 2008 and that it would take the required measures if needed.
However, it's not just GM that took the hit, Toyota's sales also came down by over 21%, while Ford's figures showed a drop of 28.1%. For the most part the mechanism seems to be the same, that is lower demand for gas-guzzlers owing to high fuel prices.
Meanwhile in Canada the trend has been replicated with the auto sales plummeting by 5.7 percent from last year to reach 159,500 vehicles in June. The drop is significantly higher than the 0.5 percent fall in May.
So How Long is it going to last?
Predictions were made earlier as well, wherein it was said that things could begin to look up for North America by 2009. However given the present trends, some experts feel that for the North American auto industry revenues could decline in 2008 and 2009. And that we could see increasing losses as the year-end approaches.
To learn more about challenges before the auto industry worldwide and for other insights, kindly visit my blog, Automobile Hotspot.
