March sales results for automakers are in: Sales at Chrysler and General Motors were down 19 percent compared with last March, and even Toyota and Honda — which had been doing pretty well — say their sales were down for the month.
As with a lot of things these days, the problems can be traced back to the housing industry and the tightening credit market.
Rebecca Lindland, who analyzes auto industry sales results for Global Insight, says a year ago, many people could depend on the equity from their homes to secure new car loans. That is no longer the case.
"Even if the consumer desperately wants to buy a car, the funds just aren't there. There aren't a lot of consumers paying cash. They're dependent upon credit, and credit isn't available right now," Lindland said.
Some automakers, such as Ford, say they expect things to get worse before they get better. But others are holding out hope that a recovery is on the way, thanks to lower interest rates and upcoming tax rebates.
"I've been doing this for over 30 years," says GM sales analyst Mike DiGiovanni, "and one thing I've learned: When times are bad, everybody predicts they will never recover, and when times are good, we never see that they'll go down."
But analysts say those good times are a ways off. They predict that the industry is headed for its worst year in a decade.
Dustin Dwyer reports from Michigan Radio.