The financial crisis is slamming the brakes on almost every aspect of the auto industry, from car dealerships to the world's major automakers.
In the United States, the National Automobile Dealers Association (NADA) says the credit crunch could force as many as 700 car dealerships or two percent of all dealerships in the U.S. to shut down this year. A separate report by a business consulting firm, Grant Thornton, says almost 4,000 dealerships will go out of business.
Even dealerships that stay open are having a tough time selling cars. NADA says most prospective car buyers need financing but that many, even those with good credit, have been unable to get loans.
As a result, car sales have been plummeting, forcing the major automakers to scale back their operations.
In Europe, General Motors (GM), Ford Motor Company, luxury car makers BMW and Daimler, and Volkswagon have announced plans to cut production.
Ford Wednesday announced plans to lay off a total of 6,000 employees at its Volvo subsidiary.
Meanwhile, shares of Japanese auto giant Toyota fell sharply today following Japanese media reports that the company's profits could fall 40 percent.
Toyota sales slumped 32 percent in September.
