Car industry gloom descends on GM, BMW, Nissan

By Christiaan Hetzner and David Bailey

FRANKFURT/DETROIT (Reuters) - The meltdown in the global car industry claimed more victims on Friday as General Motors lost another $15.5 billion, BMW warned on profits and Nissan earnings missed expectations by a wide margin.

General Motor Corp's (GM.N) quarterly loss -- the third largest in its 100-year history -- came as its North American sales fell 20 percent and plunging prices for SUVs prompted deep charges for its auto finance business.

The No. 1 U.S. automaker also burned through $3.6 billion in cash in the quarter, refocusing investor attention on whether GM can complete a rushed restructuring before its cash and available credit runs down. nN01288721

Germany's BMW AG (BMWG.DE), the world's biggest premium carmaker, said it would miss its 2008 targets after a 44 percent plunge in quarterly pretax profit.

"Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the U.S. dollar, the impact of the international financial crisis and a weaker U.S. economy," BMW said.

Nissan Motor Co (7201.T), Japan's No.3 automaker controlled by Renault SA (RENA.PA), posted a much worse-than-expected 46 percent drop in quarterly operating profit. It stuck to annual forecasts for its lowest operating profit in seven years.

On Friday, the world's automakers reported a 13.2 percent drop in U.S. auto sales in July as an uncertain U.S. economy bludgeoned manufacturers in the largest and most lucrative auto market.

It was the ninth consecutive month of declining sales in the U.S. market -- the first time that has happened since the last U.S. recession seven years ago -- and the worst showing since April 1992. nN01496226

The roiling U.S. market has also made leasing an issue for U.S.-based automakers. Chrysler's financial arm has stopped supporting leasing in the United States, while GM and Ford Motor Co (F.N) have pared those programs in favor of adding retail incentives.

MORE RISK AHEAD

Because of that pullback and tighter credit, auto executives and analysts say the industry may be battered by double-digit sales declines in coming months and cannot forecast an end to the slide.

The economic contagion is spreading to other markets, leading to a decline in Europe of nearly 8 percent last month.

U.S.-based GM, Ford and Chrysler have taken a deeper hit from the shift toward cars than transplant automakers have in the United States because of their greater focus on trucks. However, few have been spared.

Ford reported a record $8.7 billion quarterly loss in late July and even reliable outperformer Toyota Motor Corp (7203.T) has slashed sales targets. Renault has backed away from its 2009 profit forecast, Honda Motor Co Ltd (7267.T) trimmed its expectations and Daimler AG (DAIGn.DE) sharply marked down its 2008 guidance.

Privately held Chrysler disclosed some financial figures on Friday to quell concerns about its financial strength.