Nissan Motor Co said it would cut 20,000 jobs and joined a growing list of automakers warning of red ink this year in what would mark its first loss since Chief Executive Carlos Ghosn took the reins a decade ago.
The spreading global recession has put consumers off buying expensive goods and even if they wanted to purchase a car, financing has become difficult due to a dearth of credit.
Saddled with excess capacity and headcount and with sales plummeting in developed markets, Japan's No.3 automaker has already taken a number of steps to cut production and staff, including through 1,200 voluntary buyouts in the United States.
Well -- at least it's not only Detroit, right? Here are some charts from the St. Louis Fed to show the severity of the crisis:
Click for a larger image
Above is a chart of real (inflation adjusted) personal spending on durable goods that goes back to the late 1950s. Notice the drop-off in durable goods purchases is unprecedented. That tells us the severity of the crisis facing the auto markers.
Above is a chart of the percent change in durable goods expenditures from the preceding year. Again, note the severity of the drop-off. This is cliff-diving.
Above is a chart from Martin Capital Advisers of the two largest areas of durable goods purchases: homes and autos. Note that home sales have been falling for three years while auto sales have now tanked hard as well.
The chart above is from Prophet.net and it shows the auto industry's overall chart. Need I say anything more?