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Auto Crash at Intersection of Wall and Main


Credit crunch pushes sales below one million.

Tightening credit drove US auto sales below 1 million in September, the lowest figure since February 1993.

Automakers sold 964,873 vehicles in September, Edmunds reports.

Last month's auto sales were down about 27% compared with September 2007.

General Motors (GM), lifted by its offer of employee prices for most models, said it sold 16% fewer vehicles in September than a year ago; that almost counts as a victory in the current market.

Ford's (F) September sales were down 34% from a year ago.

Toyota (TM) and Honda (HMC), known for high-quality, fuel-efficient cars, reported sales declines. Toyota's sales were off 32%; Honda's fell 24%.

Chrysler said sales fell 33% in September.

Many dealers say prospective buyers find it increasingly difficult to qualify for auto loans as banks tighten lending standards in response to the credit crunch - call it the crack up at the intersection of Wall and Main streets. Several automakers have limited or halted leasing.

GM said tighter credit standards cut sales 10,000 to 12,000 each month in the first half of the year. The company didn't have a figure for September, but said it probably increased.

Autodata says September's seasonally adjusted annual sales rate was 12.5 million vehicles, down 3.7 million from September 2007.

Car sales now make up about 52% of the market as buyers prefer fuel efficient vehicles over sport utility vehicles and trucks. Ford said sales of its F-series pickup truck, often the best selling vehicle in the US, were down about 42% in September.

On Wednesday, the Senate passed a version of the $700 billion financial rescue bill loaded with tax breaks and pork. The add-ons are intended to attract at least a dozen House members who voted against a bailout bill Monday. That measure failed on a 228-205 vote, and sent the Dow Jones Industrial Average down 777 points. Bank stocks took a hit Monday after the House of Representatives rejected the bailout plan, creating a crisis of confidence.

The Senate version of the bill will be sent to the House this week. It would keep the Alternative Minimum Tax from taking a bite out of 20 million middle-income citizens. It would also provide $8 billion in tax relief for hurricane-ravished areas in Louisiana, Texas and the Midwest.
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