US Mortgage Woes Will Hit Auto Sales Warns General Motors' Boss

25 April 2007

DETROIT: General Motors' vice-chairman Bob Lutz has tolled a bell warning of the growing problems in America's sub-prime mortgage market.

These, he cautions, will have a negative impact on US auto sales as early as this month and predicts an industry-wide fall.

The warning is delivered against the background of record numbers of home repossessions, especially in the low-income and poor credit-rating sectors.

Says Lutz: "The [auto] 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.

"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."

The latest data on April auto sales is due May 1.

Data sourced from BBC Online (UK); additional content by WARC staff