As the heads of the United States' "Big Three" automakers pleaded with US lawmakers last week to save their companies from the threat of bankruptcy, a bleak image of the auto industry has emerged worldwide.
Plummeting demand brought about by the global economic crisis has hit carmakers hard as drivers cut back on consumption and switch over to smaller cars - or public transport.
Around the world, the wheels are coming off as carmakers slash production, close factories and lay off thousands of workers.
Few automakers can expect to escape unscathed. From Toyota, Honda and Peugeot to Ford, Mercedes-Benz and Hyundai, carmakers are reviewing sales targets for the coming months - and some are wondering if they can stay afloat.
"October was the worst month for US auto sales in 25 years," Nissan Motor and Renault chief executive Carlos Ghosn said at the Los Angeles auto show last week.
"Nothing is moving. The decline is not confined to the US market; Europe, Japan are also down significantly, with slowdowns in the emerging markets as well."
The situation is most dire in the US, the biggest car market in the world. Sales there have plummeted to their lowest in 17 years, putting General Motors, Ford and Chrysler on the brink of disaster.
The Big Three are asking for US$25 billion (S$38 billion) in federal assistance - which was rejected by Congress - with GM and Chrysler warning that they could go under in weeks.
Europe has suffered six consecutive months of declining car sales, with a drop of almost 15 per cent last month. Renault, Peugeot, Opel, Mercedes-Benz and Audi have announced either cutbacks or layoffs, and in many cases, both.
Japan, home of some of the world's most efficient, affordable cars, has not been spared. Toyota, Honda, Mazda and Nissan have all announced production cutbacks and staff layoffs in domestic as well as overseas plants.
The slowdown of the auto industry is potentially devastating for not just the carmakers, but also the countries they operate in.
A report by the Centre for Automotive Research shows that if one of the Big Three goes bankrupt, the US could lose 2.5 million jobs and US$125 billion in personal income in the first year alone.
In Germany, where the auto industry is estimated to provide one in eight jobs, a slowdown for carmakers will also hit the electronics, transport, chemicals, engineering and advertising sectors.
Even countries such as Thailand and South Korea have already been hit by production cuts. But what ails the industry?
Most firms lay the blame squarely on the current economic crisis, dropping demand and weak consumer confidence.
Not only are cars seen as luxury items that people can go without in these lean times, but loans from banks are also drying up.
"That's in nobody's business plan," Ms Kimberly Rodriguez, an automotive specialist with global accounting firm Grant Thornton, told Time magazine. "The best planning in the world cannot survive that fluctuation."
But others blame structural weakness in the carmakers, especially in the US.
Long criticised for their inefficiencies, US carmakers are coming under greater fire for their cost management. Much of the bailout money that they want, for instance, will go to keeping overpaid workers in their jobs, their pensions and their retirement benefits.
Critics also slam the US automakers for failing to develop smaller, fuel-efficient cars, and concentrating instead on fuel-guzzling sport utility vehicles - whose sales have been devastated by high fuel prices.
Despite all this, some carmakers are keeping their hands firmly on the gearshift, ready for a comeback.
"We are reinventing mobility," said Mr Ghosn. "There is no substitute for the car, and as soon as the economy stabilises and people regain purchasing power, the first thing they will want is to buy a car."
This article was first published in The Straits Times on Nov 23, 2008.
