The Big Three Detroit carmakers reported hefty double digit declines from a year ago and Japan’s Toyota and Honda saw single digit losses while Nissan bucked the trend with an increase in sales. Automakers saw another painful slide in US sales this August with the consumers cautious amid a weak economy. According to research firm Autodata, the total new car sales amounted to 1.249 million units, or an adjusted annual pace 13.72 million down a whopping 15.5 percent from a year ago.

According to industry source Detroit auto companies are preparing to launch a campaign for assistance next week and the goal is to have Congress approve at least 25 billion dollars in loans by the end of September. Peter Morici economist at the University of Maryland said “It is a bad time for the industry, even for those companies that are competitive.” “I don’t expect thing to improve much because the economic conditions are slowing further people don’t have any money for big purchases.”

GM’s sales were notably better than the consensus forecast for a 29 percent drop, and were arguably aided by the employee discount program said Himanshu Patel at JP Morgan Securities . Reported August that General Motors US sales slumped 20.4 percent from a year ago to 308,817 vehicles and although it pointed out that sales were up a significant 31 percent from a month earlier.

August US sales slid 26.6 percent from a year ago, citing a weak economy and sluggish demand for large trucks and sport utility vehicles said Ford Motor Co. and Ford also cited higher demand for fuel efficient small cars and SUVs but this was offset by other factors. The company said “the impact of a weak economy and lower demand for larger trucks and SUV’s resulted in double digit sales declines for Ford and the auto industry.”

The White House said it was in discussions about a proposal to give the auto industry $25 billion in government-issued low-cost loans and a sign that automakers may be making progress in their effort to get financial assistance.

Dana Perino the White House spokeswoman said “it’s something we’re aware of and we’re talking to the members of Congress and also the people in the auto industry, and thinking about what they might think would be required from their perspective.” Dana Perino said she was not prepared to say what funding amount “the White House would or would not support.” She also said the White House may say whether it supports the proposal in the next day or two.

Energy bill that was signed into law by President Bush included a provision to provide $25 billion in direct loans to automakers but the bill didn’t allocate any funding and it would cost $3.75 billion to guarantee that money. Detroit’s automakers and the United Auto Workers argue a $50 billion package may be necessary and which would cost $7.5 billion to guarantee. Automakers could use the money to retool plants to build advanced technology vehicles that were at least 20 percent more fuel-efficient than the minimum required

Obama is running advertisements tweaking McCain’s support of the smaller package and Michigan is an important state in the presidential election. Barack Obama is the Democratic presidential nominee that has endorsed the $50 billion package and while his Republican rival John McCain endorsed the $25 billion package.

Automakers were “deserving” of as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars, said a top General Motors executive. Robert A Lutz vice-chairman of General Motors said the car companies need money to retool their plants but probably cannot raise enough capital on their own because of the tight credit markets. Lutz also said the automakers have already made considerable progress in transforming themselves and that the government should help them proceed faster.

Lutz told reporters at an event near Chicago where General Motor showed off it 2009 line up that “The American auto industry is deserving of government loan guarantee,” “We have done a whole bunch of things that people said, ‘Why aren’t you doing this?’” Automakers and along with the United Automobile Workers union and lawmakers are urging Congress to appropriate $3.75 billion to back the $25 billion in loans authorized last year.

Detroit carmakers have announced plans to revamp numerous truck plants so that they can build the smaller cars and crossover vehicles. Costs of each conversion are ranging from $75 million at a Ford plant. Sales of pickups and SUVs plummeted this year as gasoline prices climbed above $4 a gallon in much of the United States. Automakers have been offering substantial discount on some models and shutting down plants that make them to keep inventories from growing larger. July, large SUV sales were down to 42% and full size pickup trucks sales declined to 28%.

This I found in the web that may interest you and give you information about automakers.

WASHINGTON (AP) — Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

Industry officials said the loans, which are twice the amount authorized in last year’s energy bill, are a top priority when Congress returns next month because of the declining fortunes of Detroit’s automakers and tightening credit markets.

“The amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they’re communicating what their funding needs are,” said Alan Reuther, legislative director for the United Auto Workers union.

Congress authorized $25 billion in low-interest loans in last year’s energy bill, but the auto industry’s allies in Congress have been unable to get funding for the plan.
The loans would provide low-interest credit for up to 30 percent of the cost of retooling facilities to build hybrids, plug-in hybrids, electric cars and other alternatives.

Detroit’s automakers have struggled this year amid a sluggish economy and consumers shunning large sport utility vehicles and trucks because of high fuel prices. General Motors Corp. reported a second-quarter loss of $15.5 billion and Ford Motor Co. reported an $8.7 billion loss.

The auto industry’s future has been a top issue in Midwest battleground states key to the presidential race. Sen. John McCain had opposed the retooling efforts, arguing that his $5,000 tax credits for consumers who buy fuel-efficient vehicles and a $300 million battery prize would accomplish the same goal.
But in a statement released Friday, the Arizona Republican said Congress should fund the loan program in the energy bill: “I believe we should fund it and take action that will assist Detroit and its suppliers in making it through this difficult time of transition.”

When applying for an auto loan, most buyers grapple with some question of whether they should opt for a fixed or floating rate option. The question assumes importance as car loans have a lower tenure than home loans, home loans have a 15 – 20 year tenures, during the borrower will go through a few rate cycles.

Car loans are for three to four years and maximum tenure: 7 years and that on an average. It means that a person mostly would find it difficult to gauge that whether they are entering a rising or a falling cycle. Many public sector banks, including State Bank of India, Bank of India and Bank of Baroda have started offering floating rates on auto loans. ICICI Bank was offering both floating and fixed options way bank in September 2007 and is planning to offer only floating rate loans in August 25. Private sector lenders are beginning to offer floating rate loans.

“Earlier, we were planning to increase over fixed and floating rates by 50 basis points each. However, now we feel that the interest rate cycle has almost peaked. For the customer, it will make a lot of sense to get into floating rate auto loans,” said N R Narayan, head of vehicle loan in ICICI Bank. He also said that the interest rates would move southwards after that.

Director of Acorn Wealth Govind Pathak said “Six months ago, the answer would have been definitely fixed because of the uncertainty in the interest rate scenario. Now, floating rate looks like a better option.” Though this is the immediate solution as far as the choosing the interest rate goes, auto buyers in the future will have to carefully gauge the scenario before taking a call on the right option.

The financial aid office at the University of Maryland is busy before classes begin. So many students returning to campus are counting on financial aid to pay for tuition, books and supplies. College students feel the effect of the credit crunch as some private companies stop issuing student loans and others raise interest rates. Abhas Mathur student said “I think in today’s day and age, student loans are very important, there aren’t too many jobs out here that cover a full student’s expense for a college education, so student loans bridge the gap.”

Each year Paul Hassler consolidates the outstanding student loans to make one interest payment, but this year, he was told he couldn’t consolidate, and the new loan carried a higher interest rate. Paul Hassler is putting his youngest daughter through college. Paul Hassler also said “the cost of the loans was running me about $550 a month, but by not being able to consolidate would have move the cost of the loan up to almost $1,100 to $1,200 for our budget, it really just would have blown things out of kilter with us.”

Financial Aid Director Sarah Bauder the University of Maryland said the rules have changed and she also said that consolidation is no longer an attractive option, and she does not recommend it anymore. Hassler rolled the student loans from private lenders into direct loans funded by the federal governemtn rather than deal with $1,200 monthly payment.

The UAW, which has endorsed Democratic rival Barrack Obama, has pushed lawmakers to fund $25 billion in low interest loans for Detroit automakers to help cover retooling costs. Automakers have embraced the idea in recent months as a vicious economic downturn has shut their access to traditional financing. The UAW President Ron Gettelfinger critizized Republican presidential candidate John McCain on Monday for opposing government loans for Detroit automakers, saying John McCain “has slammed the door on any real support for the domestic auto industry.”

In McCain’s visit to Michigan last week he said such loans would not be prudent, adding he was worried about predicting failure on the part of automakers when they have made strides on things like labor agreements. He has proposed a $300 million prize for battery research and a $5000 tax credit for consumers who buy fuel efficient vehicles.

McCain said he was open to more direct aid for Detroit’s automakers, an opinion piece printed in the Detroit News. McCain’s proposals would do little to return jobs said Gettelfinger. Obama has backed a UAW proposal for Congress to approve $4 billion this year that would cover the costs for lending $25 billion, a plan that faces many hurdles to passages

In applying for a car loan there are things you need to consider. If you have applied for a vehicle loan or planning to apply for one, these 5 things you must know. First shop online, shopping for auto loan online is a time saver. Almost all information you can get at a click of a mouse and pick the best deal by comparing offers from different sites. Second, know the basic criteria for applying for a loan. Best is if you earn at least Rs 20,000 per month and have six month bank statement ready for your lender’s perusal. This helps your lender understand you’re spending habits better and help you in getting loan at a cheaper interest rate.

Third is to get approved first, don’t make a mistake of looking for a car before getting a bank’s approval. Get you loan approved first from your lending bank or finance company. Then get sanction letter from lending bank or finance company to know the amount of loan approved. Four is down payment, this varies from lender to lender, and some do not even require you to make a down payment but typically it is about 10 percent of the vehicle you want to purchase.

Last is the interest rates, interest rate is not fixed, but it can surely be negotiated. If you have negotiating skills you can bargain for a lower interest rate. It is always better to ask an authorized dealer or loan official for their advice. If there is something you don’t understand ask them. They are there to answer your questions.

Since the private equity firm bought 80.1 percent of Chrysler from the former DaimlerChrysler AG one year ago this week, little has gone right. Gasoline spiked to $4 per gallon, driving people away from the trucks and sport utility vehicles that dominate Chrysler’s lineup. Consumers were spooked by a weak economy, the U.S. housing market went belly-up, and credit markets tightened, limiting Chrysler’s ability to borrow. U.S. auto sales are down 11 percent this year and aren’t expected to improve soon.

Gerald Meyer a former chairman of American Motors Corp. said “Their timing is horrendous,” and “They couldn’t have picked a worse time to get into the automobile business domestically.” Gerald Meyer is now teaches leadership at the University of Michigan. The troubles are mounting. Chrysler’s sales are down 23 percent so far this year, the worst drop of any major automaker, and it has stopped offering leases through its financial arm because of falling truck and SUV values. Chrysler Financial only renewed $24 billion of its $30 billion in credit lines, which will hurt Chrysler’s ability to provide loans to buyers and dealers. Fitch Ratings has downgraded Chrysler further into junk territory, saying it expects the company’s finances to fall to the minimum levels required to fund its operations as early as next year.

The maker of Town & Country minivans, Dodge Ram pickups and Jeep Wranglers would not make any executives available for this story, but in a conference call to announce July sales last week, Vice Chairman and President Jim Press said a company should be judged by how it performs when times are tough.

“The strongest steel comes from the hottest fire, and while this is like dancing on the sun, we’re making significant improvements in our business,” said Press, who was lured from Toyota Motor Corp. to lead Chrysler’s marketing.

Last fall, Chrysler negotiated a new contract with the United Auto Workers union that’s expected to save billions in retiree health care costs and manufacturing wages. It has announced partnerships with Asian automakers that could help expand its small-car lineup and its global reach - something Chrysler desperately needs since it relies on trucks, SUVs and crossovers for nearly three-quarters of its sales. And it recently tied with industry leader Toyota for North American manufacturing productivity, according to the influential Harbour Report.

The Auburn Hills, Mich. based automaker says it’s performing ahead of its own expectations, with $11.7 billion in cash on hand at the end of June and earnings of $1.1 billion in the first half of the year before interest, taxes, depreciation and amortization. That means it is making money from its core business of making and selling cars, but before financial obligations like paying taxes, servicing debt, deducting the value of aging assets and recording expenses that are taken over time.

As a privately held company, Chrysler is not required to release financial information, and it didn’t provide its net income or other details. Daimler AG, which owns the remaining 19.9 percent of Chrysler, indicated through its own financial results last month that Chrysler lost an estimated $510 million in the first quarter.

Chrysler cites significant job cuts and asset sales as some of the reasons it is exceeding its targets - it has announced plans to cut 29,000 hourly, salaried and temporary jobs over the last 18 months. But JPMorgan auto analyst Himanshu Patel estimates that Chrysler will burn through nearly $4 billion this year. The tumult has led to rampant speculation about what’s ahead.

Aaron Bragman, an auto analyst with the consulting company Global Insight, said Chrysler may be releasing financial information to make it look healthier to potential bidders. Other analysts have suggested Chrysler Financial’s exit from leasing is aimed at making the unit more attractive to buyers.
Even if a sale isn’t on the horizon, Bragman said, Chrysler has so few products in its pipeline that it’s hard to see a turnaround plan besides relying on partnerships to add small cars to its lineup.
Chrysler spokesman Rick Deneau said the automaker is introducing six products this year. None, however, is a smaller, more fuel-efficient car like buyers have been demanding, although two are hybrid SUVs. By comparison, 18 of the 19 new vehicles General Motors Corp. says are coming by 2010 are cars or crossovers.
It’s harder for Chrysler to justify the expense of developing new products, Bragman said, because its market is so limited to North America, so it can’t sell as many. Sixty-five percent of GM’s sales come from outside North America, while just 9 percent of Chrysler’s do.

Meyers suspects Cerberus will eventually sell pieces of the company to get some of its cash back, perhaps to a Chinese automaker eager to enter the U.S. market. For its stake in Chrysler, Cerberus agreed to invest $6.1 billion in the automaker and its financing arm and to pay Daimler $1.4 billion.

“The impatient money has become even more impatient, and Cerberus is an impatient money company. How long can they tolerate negative cash flow?” Meyers said. “I wish I could be more optimistic, but I don’t see any daylight here.”
Chrysler has denied a sell-off is in the works. In June, Chrysler Chairman and CEO Bob Nardelli, who was brought in by Cerberus after a controversial stint at Home Depot Inc., said he expects Chrysler will still be an independent company three years from now, and that Cerberus isn’t second-guessing its investment. Louis Lataif, dean of the school of management at Boston University and a former Ford Motor Co. executive, said he believes Cerberus can be more patient than a public company, which has large institutional shareholders that demand a quick return on their investment.
“I doubt seriously as an outsider that they were planning a quick spin here,” he said.
At the very least, Bragman said, it’s probably better that Chrysler is in the hands of Cerberus and not Daimler, which has problems of its own as European sales slide. The German company likely would have faced significant pressure from shareholders to kill Chrysler’s brands or dump them for even less than Cerberus paid. Daimler paid $36 billion for Chrysler in 1998.
“It may be that they sold Chrysler as possibly the best moment they could for their own health,” Bragman said. Kevin Beltz, the owner of a Dodge dealership in Indianapolis, blames Daimler for the poor model lineup that was approved during the companies’ rocky marriage. He praised Chrysler’s new attention to the nuts and bolts, like improving the cheap image in the cars’ interiors.
Beltz said he wants Chrysler to focus on its status as an innovator - the inventor of the minivan and stylish products like the Chrysler 300 sedan. And he’s confident Cerberus has the team in place to do that.

Rick Wagoner, Alan Mulally and Robert Nardelli the Chief executives of General Motors Corp., Ford Motor Co. and Chrysler LLC, talked and agreed that access to capital is their most critical short-term need during this volatile period of high fuel price and slumping SUV and truck sales. The Detroit’s three automakers are urging Congress to make as much as $35 billion to $40 billion in low-cost loans available during the next two to three years, assure that the companies survive long enough to retool and build a new generation of fuel efficient vehicles. All three companies are hemorrhaging cash and having trouble borrowing. General Motors Corp., Ford and Chrysler last Sunday followed up with phone calls to leaders of Michigan’s congressional delegation including U.S. Sens. Debbie Stabenow and Carl Levin, plus Reps. John Dingell and Sander Levin. Monday, Democratic presidential candidate Barack Obama proposed $4 billion to help automakers in Detroit to build the cars of the future. Stabenow told that some of the money would go to battery research; some could be used to help leverage loans of more than $10 billion for retooling plants.

General Motors reported a second-quarter loss of $15.5 billion Friday and a week after Ford posted an $8.7 billion loss for the same period. Chrysler failed to renew all of its $30 billion in short term debt, coming up $6 billion short after a month of negotiation with banks. Though Michigan’s two senators and most influential House members are Democrats, they want to mount a bipartisan campaign to help the industry, just as Washington has been quick to rescue Bear Stearns, Fannie Mae and Freddie Mac from financial collapse.