NEW YORK (Bloomberg) — General Motors Corp. shares fell to their lowest level since 1954 after a Merrill Lynch & Co. analyst said the automaker may need to raise as much as $15 billion and faced the possibility of bankruptcy.

The "dramatic drop-off" in the US sales market probably will continue through 2009, forcing GM to find additional funding, analyst John Murphy, who lowered the shares to "underperform" from "buy," said in a report. "Bankruptcy is not impossible if the market continues to deteriorate."

GM dropped $1.77, or 15 percent, to $9.98 in New York Stock Exchange composite trading yesterday. That was the lowest since September 2, 1954, adjusted for splits, according to Global Financial Data in Los Angeles. The shares' daily percentage decline was the steepest since October 19, 1987.

Murphy's assessment follows Detroit-based GM's report yesterday that its June US auto sales fell 18 percent, as rising gasoline prices damped demand for pick-ups and sport-utility vehicles. Merrill's figure on how much the largest US automaker may have to raise is more than estimates last month of as much as $8 billion by Bank of America Corp. and $10 billion by JPMorgan Chase & Co. Merrill also cut its share-price estimate by 75 percent to $7. The stock's 74-percent drop in the past 12 months is the most among the 30 companies in the Dow Jones Industrial Average.

The automaker has "sufficient liquidity and financial flexibility to meet its 2008 funding requirements," said GM spokeswoman Renee Rashid-Merem in an e-mail. The company may consider "reducing structural costs, selling non-core assets, and retiming or eliminating other capital spending," she said.

GM had $24 billion in cash and marketable securities and access to about $7 billion in undrawn US loans on March 31, at least $6 billion more than it initially figured it would need for a US decline, chief financial officer Ray Young said on May 13.

The automaker said yesterday that it plans to cut North American production this quarter 12 percent to about 900,000 vehicles. Automakers book sales when a car or truck is built, so lost output reduces revenue. Strikes at GM's largest axle supplier and two of its own plants trimmed production in the region 27 percent last quarter.