Automotive Update

The economic analysis last January 2009 reflected that auto sales in the US dropped to 37.1%. This is the lowest auto sales record in 27 years.

Even the countries biggest car manufacturing tycoons are facing big losses: Ford Motor fell by 41,6%, while General Motors suffered from a 49% drop. Chrysler, for the 2nd month in a row, also has decreased sales by 50%. Even the mass driven Toyota, Honda and Nissan have suffered from a 27% drop out of their usual sales.

If these figures are familiar, it’s because the US suffered from a very similar drop in car sales in August 1982. As in the 1982 fall, only about 9.8 million units were sold this year. At least, it’s still a far cry from December 1981’s 656,881 figure.

The huge decline of car sales, manufacturers say is caused by the huge credit crunch. One of the US’s primary banks, the GMAC, officially stopped consumer lending last autumn. They only approved loans from creditors with spotless credit records.

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A dramatic scale back for the proposed tax break has been made, as will be seen in the last work up of the economic stimulus bill.

Arranging interests on auto loans and sales and excise taxes have been the task of auto dealers and their allied companies. New vehicles that were purchased are deductible from federal taxes. These strategies are vital to be able to get the peak of showroom sales and traffic.

But with the final revision of the stimulus bill, it only makes the excise taxes and sales taxes deductible. This is made between the arrangement of the House and Senate negotiators. A spokesperson for Sen. Barbara Mikulski declared that loan interest provision was dropped.

Some sources have said that the reduction in the tax break for the purchases of new vehicles have been trimmed down from the price of about $11 billion to approximately $2 billion. The negotiators in the Congress have worked its way to make the limit of the cost of the stimulus bill to be able to appease lawmakers who fret over spending.

Sen. Barbara Mikulski, D-Md, is the one who sponsored the original proviso on the issues regarding vehicle purchasing at the call for dealers. The spokesperson of Mikulski said that the senator considered the sales and excise taxes deduction a momentous achievement.

The Stimulus Bill is now declaring for $789 billion in tax cuts and for new spending. President Barack Obama said that the bill is made in order to prevent the deteriorating situation in our present global economy.