Ford sales plunge

Sales at Ford Motor Co. plunged in September as tighter credit for buyers and dealers during the month combined with stubbornly high fuel prices to sharply curtail demand for its vehicles.

Ford (F, Fortune 500) reported that U.S. sales tumbled 35% from a year earlier. Sales tracker Edmunds.com had forecast a 25% drop in sales in the period.

Overall industry sales are expected to fall 20% from year-ago levels. Experts said many consumers were apparently reluctant to make big ticket purchases at a time of economic upheaval.

And for those who wanted to buy a car, some were unable to get a loan as the credit markets tightened during the mounting crisis on Wall Street.

In addition to auto loans being more difficult to get, a growing number of dealerships also have been hit by the credit crunch and have found it increasingly tough to get the cash they need to do business.

"Consumers and businesses are in a very fragile place," said Jim Farley, Ford group vice president. "An already weak economy compounded by very tight credit conditions has created an atmosphere of caution."

The run-up in gas prices earlier this year had already hurt customer demand for the SUVs and pickup trucks that were crucial to Ford's lineup of vehicles as buyers turned away from those models and to more fuel efficient cars. While gas prices have fallen about 12% from the record high levels hit in July, they are still about 30% higher than the same time a year ago.

But the sales decline for Ford in September was broad based. Sales for almost every model of car or truck offered by Ford, Lincoln, Mercury and Volvo fell at least 10% from the same period last year.

Ford's SUV models plunged 57%, while pickup and van sales tumbled 39%. But Ford even had a rough time selling more fuel efficient vehicles. Sales of so-called crossover vehicles, which are a more car-like SUV, dropped 30% despite a high-profile introduction of a new model, the Flex. Sales of car models were down 19%.

The other automakers are due to report later in the day. General Motors (GM, Fortune 500), the nation's largest automaker, is expected to report that sales fell 24% while Chrysler LLC sales are forecast to drop by 37%.

But it's not just U.S. automakers that are being hit by the credit squeeze. Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY) are expected to post steep declines in U.S. sales as well.