(By Salman - iStockAnalyst Writer)The ongoing crisis in financial markets seems to have taken a heavy toll on US automakers. Already, the car makers were earlier reeling under the impact of a sharp jump in Gasoline prices, fall in home prices and a gloomy outlook for economy. The current crisis at Wall Street has only intensified the problem for the companies, as they battle a slumping US auto industry.

On Thursday, shares of GM were down $0.42 or 4.44% to $9.03.GM stocks are almost 80% down from its year high. Shares of Ford (F) dropped $0.20 or 4.40% to $4.35.Ford stocks are about 53% down from 52 week high. Similarly Toyota Motors, on Thursday finished with a loss of 6.19%, and stocks are down 33% from 52 week high.

With banks tightening up lending due to current credit crisis, the demand for automobiles, especially for luxury cars, SUVs and trucks has greatly reduced. Borrowing costs have shot up while buyers and dealers are finding it hard to get auto loans. According to CNW Marketing Research in 2007, nearly 83% of auto loan applications were approved while in 2008, the figure has remained a dismal 63%. Dealers too are finding themselves in trouble and last week one of the biggest new car dealers in the country, Bill Heard Enterprises, closed all 14 of their Chevrolet dealerships. The company has filed for Chapter 11 bankruptcy protection, letting go 3,200 employees in the process.

Drop in car sales numbers is now being seen across the board. Sales of Cars are down 11th Month in a row in September. The figures are equally disappointing for Big Three from Detroit and the Japanese Car makers. GM, Ford, Chrysler, Toyota, Honda, Nissan, Hyundai, and Porsche -all posted double-digit decline in sales
September was particularly a bad month for car makers as U.S. sales figures fell below the 1 million mark for the first time in more than 15 years. According to sales tracker Autodata, overall industry sales tumbled 27% to 964,873 vehicles, a level not seen since February, 1993.It was the biggest year-over-year drop in sales since January 1991.

General Motors Corp. (GM) sales dropped 15.6% to 282,806 vehicles as against analyst estimates of 23%. This relatively better performance, by industry standards was reached thanks to company's aggressive discounting. Sales of GM's cars fell 10% while sales of light trucks - such as pickups, SUVs and vans - declined 19%. Though the numbers are indicating falling demand, still GM executives seem satisfied with the results.