The Auto Writer

September car sales reports will be trickling in over the next few days and the news isn’t likely to be pretty especially for America’s automakers. Despite extending its “employee pricing” for the month, GM will see double digit losses once again, furthering its year long slide.

Every automaker will suffer though it may not seem as bad for Honda which has weathered the market downturn quite well, thanks to its portfolio of fuel efficient cars. However, even Honda will have to wonder just how many sales were lost in September thanks to a credit market that went into a tailspin a few weeks back.

Through August 2008, year to date sales have been down 11.25% (according to Autodata), a drop off of 1.2 million vehicles. With the financial market in an upheaval and credit more difficult to get than ever before, Edmunds and others see a 20% drop off in September sales possible.

“The automakers and dealers tell us the credit crunch is the number one reason for the drop in sales. People want to buy cars but can’t get financing,” commented Michelle Krebs, Senior Editor of Edmunds’ AutoObserver.com. “Plus consumer confidence, which is waning in light of the near-collapse of the financial sector, is another critical factor that just isn’t there.”

What has to be worrisome for most automakers, particularly the Big 3, is cash on hand. All three claim to have sufficient cash to take them through until the end of 2009 and, thanks to a recent federal government loan package, could have enough money to carry them through for several more years beyond that date.

Then again, the ugly specter of an overall financial collapse could spook markets and force a financially strapped federal government to reassess the loan package or delay its implementation. These are uncertain times for Americans and that uncertainty means that many consumers will delay their purchases until absolutely necessary.

Pity the person who hangs his or her hat on the auto industry as the worst may still be before them.

(Source: Edmunds.com)