October Car Sales Even Worse than Expected

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Across the board, auto executives see their plight linked to the credit crisis. "The customers need to have a clear mind that they can get financing," says Jim Press, vice chairman at Chrysler, where sales dropped 35% last month.

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Toyota Motor Co., despite its financing deals and a heavy advertising schedule, reported that sales of its SUVs dropped 32% and sales of its pickup trucks fell 42%. Even sales of the ubiquitous Toyota Camry took a hit. "Right now the market is quite challenged," says Robert Carter, Toyota's vice president of sales, noting that even lower gasoline prices have failed to excite consumers.

Farley says no one in the business knows just how deep the slump will go or how long it will last. "With all the merchandising going on, the true test will come in the first quarter of next year," says Farley. Farley adds that carmakers are seeing stress even among what has been the industry's most reliable — though low-profit — customers over the years: "We are seeing quite a bit of capital stress on our rental partners."

"We are experiencing one of the most challenging times in recent automotive history," says Dave Zuchowski, Hyundai Motor America's vice president of national sales. But Zuchowski takes his best shot at optimism: "With the financial markets beginning to stabilize and the election behind us, we believe consumer confidence will be bolstered, and prospects who have been on the sidelines during this period of uncertainty will re-emerge into the market," he says. Or maybe not.

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