GM sales decline, possible bankruptcy looms

OSHAWA -- The bad news and grim forecasts just keep on piling up for General Motors.

Amid a massive decline in June sales figures, there are reports the auto giant is facing the possibility of bankruptcy.

Canadian sales were down about 24 per cent in June compared to June 2007. Year-to-date Canadian sales are down almost 11 per cent, according to a report from DesRosiers Automotive Consultants.

The news of sales decreases came at the same time as reports saying GM could be facing bankruptcy if the market continues to worsen.

GM’s stock price dipped below $10 per share Wednesday for the first time since 1954. The share price was up above $10 by end of trading Thursday but is well off its 52-week high of $43.20.

The DesRosiers report also said GM’s market share had dropped 3.2 percentage points in Canada. The company’s current market share is 21.4 per cent of vehicle sales among all producers in Canada.

GM dealers in the United States delivered 265,937 vehicles in June, down eight per cent from June a year ago. Truck sales declined six per cent during the same period.

Light vehicle sales across companies in June were down 5.7 per cent. In an e-mail auto analyst Dennis DesRosiers called June a soft month compared to last year but added that 2007 was the best June on record so it was going to be very difficult to eclipse. As well June 2007 had 27 selling days whereas June 2008 had 24.

Overall, the Detroit Big Three had a low month, with the three companies selling 15 per cent fewer vehicles in June this year than June 2007. In contrast, sales of vehicles with import nameplates were up almost five per cent.

The picture for the auto industry is not all bleak, Mr. DesRosiers said.

“We still think that come the end of the year that sales will be slightly behind last year’s number, although the market could surprise us by coming in a little stronger,” he said.