US vehicle sales plummet
The 'big-three' US vehicle manufacturing firms have reported huge drops in sales during February, dealing a new blow to the ailing US economy.
General Motors reported a sales drop of more than 53 per cent compared to 2008 on Tuesday, Ford said its sales were down by 48 per cent, while Chrysler posted a 44 per cent fall in sales for the same period.
General Motors said the industry-wide sales plunge brought its February sales to the lowest level for the month since 1967.
The poor figures come despite car-makers spending more on rebates, low-interest financing and other incentives in an effort to increase sales.
General Motors and Chrysler have asked the US Treasury for another $21.6bn in loans on top of the $17.4bn approved in December.
Ford last week reiterated assurances that it can survive the current economic downturn without resorting to government aid.
Earlier on Tuesday Toyota, Japan's crisis-hit car maker, said it had approached a government-backed bank for a $2bn loan to help its financial unit ride out the global credit crunch.
It also reported a 40 per cent sales drop in the US for February.
The US economy is struggling amid a global downturn and continuing turmoil in financial markets.
On Tuesday, Barack Obama, the US president, said that he saw little hope of improvement in the near future.
"The economy's performance in the last quarter of 2008 was the worst in over 25 years. And frankly the first quarter of this year holds out little promise for better returns," he said.
The Dow Jones Industrial Average share index fell 39.34 points (0.58 per cent) to end the day 6,723.95 in response to poor economic data.
But Obama, during a meeting with Gordon Brown, the British prime minister, said it was important not to focus on share prices.
"What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the US and the entire world economy to regain its footing."
On Monday, US stocks fell to their lowest levels in more than 11 years after US insurance giant AIG reported a $61.7bn loss, the worst ever for a US firm.
Ben Bernanke, the chairman of the Federal Reserve, told the Senate Budget Committee on Tuesday that he was not happy that the firm had been given a further $30bn in government loans, its fourth bailout by the taxpayer.
"I share your anger," Bernanke said.
But he added that the government didn't really have a choice but to take the action because the collapse of AIG would have grave implications for the ailing US economy.
Bernanke and Tim Geithner, the US treasury secretary, and Peter Orszag, the Director of Office of Management and Budget, are testifying to US congressional committees on the state of the economy this week.