U.S. Auto Sales Continue Free-Fall in November

(MoneyWatch)  U.S. auto sales were another punch in the gut in November, falling to the lowest level in 26 years.

The bad news could help the Detroit Big Three automakers make the case for a government bailout in Congressional hearings later this week, said Mike DiGiovanni, executive director of global sales analysis for GM.

"This is not a GM problem we are facing, this is an industry problem," he said in a Dec. 2 conference call.

"It's (the auto industry is) in an unsustainable position. We cannot continue to operate at these levels or else the whole industry is going to go down, and hence the need for federal stimulus," DiGiovanni said.

Light-vehicle sales fell 36.7 percent to only 746,789 for the month, according to AutoData Corp. That corresponds to a Seasonally Adjusted Annual Rate of only about 10.2 million units, down from a SAAR of about 16.1 million in the year-ago month, AutoData said. That also made November 2008 the worst month since October 1982, AutoData said.

"The carnage was widespread," said Mark LaNeve, vice president, GM North America vehicle sales, service and marketing.

GM sales fell 41.2 percent from the year-ago month; Ford fell 29.7 percent; Chrysler fell 47.1 percent. Import brands dropped, too. Toyota, including Lexus and Scion, was down 33.9 percent, despite unprecedented zero-percent financing offers; Honda and Acura combined fell 31.6 percent; Nissan and Infiniti combined were down 42.4 percent, also despite generous incentives.

GM and Chrysler are especially vulnerable because their captive finance companies are having trouble borrowing money with which to originate new loans. Ford Credit and most import captives are not experiencing as much trouble as GMAC and Chrysler Financial, yet sales of virtually every brand are down, while consumers sit on the sidelines.

"We definitely need the credit markets to thaw," DiGiovanni said. Whether you have a grocery store or a lemonade stand, you borrow money to buy the items you sell, you make a profit, and then you pay it back," he said.

The drop in November sales comes on top of a 31.9 percent drop in October.

"It's breathtaking," LaNeve said.