US: Credit availability 'needs addressing urgently'

By just-auto.com editorial team | 22 December 2008

While a 'bailout' for GM and Chrysler has been approved to provide them with emergency liquidity into next year, analysts at Edmunds believe that government action to support the US vehicle market is urgently needed or any bailout is irrelevant.
Veteran auto industry commentator Michelle Krebs told just-auto that a stimulus to the auto market from the government is required.
"No bailout is going to help unless people start buying cars," she said.
Edmunds forecasts that this December's US light vehicle market SAAR will dip under 10m units. Edmunds says that such a rate of sales doesn't even cover normal replacement rates.
Krebs said that so far the government is not addressing the fundamental need for a stimulus to get market volume where it should be.
"The really frustrating thing is that they [the US government] gave billions to the banks and the banks will not touch the auto business. They won't give loans to the manufacturers, to dealers or to consumers. Until that issue is addressed, the bailout to GM and Chrysler is doomed and so are the other automakers here," Krebs said.
"Sales would undoubtedly be higher if consumers could get finance. We at Edmunds can see the shopping patterns and shopping has stopped because people can't get credit or they think they can't.
"Nobody is talking about this and that's why we are raising the issue."

Dave Leggett