Are you in the market for a new car? It seems not as many consumers have been out kicking tires, as automakers would like. On Friday the latest figures for U.S. auto sales were released. The numbers confirmed what many on Wall Street were already painfully aware of. Auto sales in November fell 3.4% to 1.236 million vehicles to a seasonally adjusted average of approximately 16.58 million units, the lowest rate since April 1999. The outlook for next year isn't a whole lot brighter as industry experts suggest sales could drop to between 16 and 16.5 million units. Last month figures at Daimler Chrysler (DCX) reflected a 5.5% decline, while sales at Ford (F) dropped off 7.2%. At General Motors (GM) the shortfall amounted to 8.1%. The weak numbers marked the fourth straight month of declines.

Is this weakness a result of the softening economy? You bet. Some point to higher gas prices, which can be figured into the equation. Higher interest rates? Tougher credit? Sure, a bit of the blame probably should go to Alan Greenspan and the Fed. While traditional carmakers are suffering from weaker sales BMW AG, Toyota Motor Corp., Honda Motor Co., Volkswagen AG, Ford's Land Rover and Jaguar brands all reported record sales for November. According to several analyst's Detroit's "Big Three" are suffering as demand for their high-profit big sport-utility vehicles and trucks continues to weaken in light of more European and Asian competition, higher gas prices and tighter credit. Despite the declines in November, auto sales will still be strong by historical standards. According to Paul Taylor, chief economist at the National Automobile Dealers Association, Detroit is on pace to have one of its best years. Unfortunately, the same cannot be said for the stock price of the "Big Three."

Well, where to start? DaimlerChysler has a little bit of everything going on. About two weeks ago DCX's supervisory board replaced James Holden and announced the appointment Dieter Zetsche as CEO. Zetsche has been given the daunting task of turning things around at DCX. Some question whether Zetsche has the right background, or if he will receive the needed support from the rest of Chrysler to get the job done. The company said it will be the up to the new CEO to "fundamentally re-position and restructure the business" with a program that will be unveiled next year, to cut costs and improve market performance. As if they don't have enough problems, two class action lawsuits were filed this past week against the company alleging Daimler lied when it said the 1998 merger with Chrysler was one of equals. Next on their list of items to be fixed are approximately 769,000 minivans. DCX said Thursday is had recalled 1993 and 1994 Dodge Caravan and Grand Caravans, Plymouth Voyagers and Grand Voyagers, and Chrysler Town & Country minivans to reinforce loose steering wheels. Fortunately, at this point, there have been no reports of accidents or injuries due to the problem. Some 25,000 workers will be temporarily laid off as the company is shutting down seven plants this month for between one and two weeks. To add insult to injury Moody's Investor Service cut DaimlerChrysler's long-term debt rating on Friday, because they expect the performance of Chrysler's division to decline from 1999 levels. A ratings downgrade normally increases the company's borrowing costs. In October, S&P revised its outlook for DCX's corporate credit ratings from stable to negative. Did we forget to mention DCX missed analysts estimates in October by 2 cents, as third quarter profits came in at 29 cents a share compared to $1.30 in the same period a year earlier. It's been a brutal ride for shareholders as they've seen the price of DCX stock drop from a high $78.69 in Mid-January, to a low this week of $37.75.

Over at the No. 2 automaker, things aren't much better. Ford not only told Wall Street that its November sales dropped 7.2%, but issued an earnings warning on Friday. Actually, if it hadn't been for the sales of its Jaguars, Volvos and Land Rovers sales would have been down 8.2% in November. The company issued a less than positive forecast for North American production for the coming year and announced plans to layoff and unspecified number of passenger care assembly plants in the week before Christmas. Ford said that because of production cutbacks in North America and Europe it now expects fourth-quarter earnings of about 75-cents a share, 10 cents less than earlier estimates. Sales of Ford's Explorer sport utility vehicle continued to be hurt by the Bridgestone/Firestone tire recall. Explorer sales dropped 11.8% to 33,430. Ford has also come under criticism from it dealers for numerous other quality problems. In all the company forecast first-quarter production would total 1.157 million cars and trucks, down 10% from the first quarter of 2000. Ford saw its share-price drop from $45 to just under $30 when the Bridgestone/Firestone situation began to unfold. In the last four months, Ford has drifted sideways to lower making a new 52-week low this past Thursday at $22.56. On Friday, Ford also issued a recall. Roughly 875,000 Explorer and Mercury Mountaineer sport utility vehicles were recalled to replace possible faulty suspension parts. Company officials said there have been no reports of injuries and only two "minor" accidents. As expected, analysts have dropped their ratings recently. Most of the comments naturally are on the cautious side. However, analysts seem to be more skeptical of the overall economic outlook, rather than projecting a negative view of the company itself.

The World's largest automaker General Motors didn't fair any better in November. GM reported an 8.4% drop as both car and truck sales declined. Analysts were anticipating a weaker month however the drop was somewhat bigger than expected. Last week, GM predicted an industry wide slowdown of between 4% and 7% for November from a year earlier, and warned that sales would fall accordingly. The company said it had expected industry sales to moderate after very strong sales last year. Company officials pointed to the fact that growing sales in the truck market remained are very important to its overall performance and it is "on track to set an all time record for truck sales this calendar year. When considering GM as investment, it's a little different than either DCX or F. General Motors competes in the other areas besides the auto industry. Through its ownership in Hughes Electronics (GMH), GM competes in the wireless communications arena. Besides the speculations that sales would fall at GM, the company has seen its share of speculation this past week concerning GMH as well. Prudential Securities analyst Michael Bruynesteyn came out with comments suggesting GM had suspended its stock buyback program to prepare to sell or spin-off Hughes. A company spokeswoman called the report "highly speculative" and would not discuss GM's market actions. On Tuesday, GM hit a new 52-week low of $48.44, well off its high from back in late April of $94.63. Speculation that something may be in the works with GMH added a little stability to shares of General Motors. As far as the bottom line, profits have declined as well this year although some suggest GM will fare better in the long run.

What's it going to take to turn the auto industry around? Keep in mind the major players are by no means going broke. All three are simply coming off record numbers from last year. At this point, sales have obviously slowed. One trip to your favorite dealer would show inventories are very, very high with most cutting prices and offering deals and great incentives. More players and more new models have crowded the market as well. A thorn in the side of the "Big Three" is the attack on their so-called "bread and butter" light truck business. According to several reports, Toyota, Honda and Nissan seem to be taking a bigger slice of that pie. Some analysts suggest its only going to get worse before it get better for the folks in Detroit. Is it time to start trying to pick a bottom in auto stocks? That's strictly a personal decision. DCX, F, and GM are trading near 2-3 year lows. We can tell you all three are technically oversold and have been for some time now, which would suggest a bounce is in store. Some would suggest now is a great time to begin to accumulate shares of your favorite auto company, based on the old theory that they are so far out of favor on Wall Street. Others believe there's more room to the downside and a turn around is not in the immediate future. Until the Alan Greenspan and the Fed loosens it's grip and recognizes the economy has began to slow, we would probably tend to "steer clear" of the auto industry. While now may be a great time to buy a car, owning these stocks are an entirely different question.