Biz people: Mortgage crisis hits auto sales

The crisis in the US mortgage market has hurt US auto sales this month, said a senior General Motors Corp executive in one of the highest-profile warnings on the risk of spillover from weaker housing to other areas of the economy.

GM Vice-Chairman Bob Lutz (above), who was in Louisville, Kentucky to attend an automotive industry conference, said he did not know how GM's sales had performed in April, but said he expected the whole automotive sector would feel the impact of the stress on the housing finance market.

"The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown," Lutz told said. "A lot of people are finding themselves in a position of reduced affordability and that has had an impact, not just on us, but across the industry."

For the first three months of the year, US industry-wide auto sales were down 1.2 percent from a year earlier.

GM, and its Detroit-based rivals Ford Motor Co and Chrysler Group, had forecast a flat to slightly weaker vehicle market going into 2007 before the pressure on subprime lenders intensified.

(China Daily 04/25/2007 page16)