Bankruptcy rumors are killing GM and Chrysler sales

Because of the rumors of bankruptcy, fewer new car shoppers are considering vehicles from General Motors Corp. and Chrysler LLC at a time when consumer attention is focused on their request for further U.S. government aid, according to a survey released today.

The share of car shoppers who say their primary choice would be a vehicle from one of the GM brands dropped by almost 12 percent, while the share for Chrysler dropped by a third, according to the study from CNW Research.

“There is nothing to stop the slide in intentions for those on the downside of this survey," CNW said in a monthly research note on the auto market. “But the decisions to cut back on advertising haven’t helped GM or Chrysler. Nor has the talk of bankruptcy, which continues to haunt those brands."

Ford Motor Co., the only U.S. automaker not relying on emergency aid from the U.S. government, has seen a nearly 12 percent increase in the share of car shoppers who say it would be their first choice.

The CNW survey was based on responses from more than 40,000 consumers who say they intend to buy a new vehicle. The study was conducted in January and February, when GM’s sales plunged by 51.1 percent and Chrysler’s dropped by 49.1 percent from year-earlier levels.

[Editor's Note: This is why the government cannot let these two companies fold and they must get them on sound footing ASAP to stop the bankruptcy rumors or their cash flow will completely dry up and they will collapse sending the USA economy into a depression.]