Auto Industry is feeling the heat from the credit crunch in the US market and is heading south
General Motors reported that sales of cars and light trucks dropped 16% compared to September a year ago. Sales at Ford tumbled 35% from last year and Toyota says September sales down 32.3%. Chrysler LLC sales are forecast to drop by 37%.
Auto industry is starting to look like the Real Estate market (though there have been no bubble , like we saw for housing ) , but analyst predict that as many as 3,800 U.S. car dealerships could fail this fall and into 2009 — nearly one in five — because of weak sales, increased operational costs and the credit crunch.
If on an average a car dealer employs around 50-60 employees , we are looking at a minimum 200,000 job losses. And if these auto giants start to go bankrupt the amount of job loss is unimaginable.