DETROIT (Bloomberg) — General Motors Corp. and Ford Motor Co. said US sales plummeted at least 40 percent in January and Toyota Motor Corp. dived by almost a third as the recession ravaged demand in the world's biggest auto market.

The declines were 49 percent at GM, the largest Us automaker, and 40 percent at No. 2 Ford, according to statements released yesterday. Toyota dropped 32 percent, Honda Motor Co. fell 28 percent and Nissan Motor Co. was down 30 percent.

The reports showed the toll of sinking confidence among car and truck buyers. GM, Ford and Chrysler LLC executives have all said that January deliveries may have tumbled to an annual rate of fewer than 10 million vehicles, after full-year sales averaged almost 17 million this decade before 2008. "In this downward spiral, as a company it's hard to plan your business and as a consumer it's hard to change your sentiment," said Joe Barker, an analyst at consulting firm CSM Worldwide Inc. in Northville, Michigan. "We're all looking for some sense of stability in the sale rate."

Sales may have tumbled 49 percent at Chrysler, the third-biggest US automaker, according to analysts surveyed by Bloomberg.

Ford's sales to non-business customers were in line with company expectations and retail demand "appears to be stabilising", the Dearborn, Michigan-based automaker said in a statement. Ford initially released a tally that didn't include Volvo, showing a 39 percent drop for its domestic brands.

January's industry-wide sales rate may have slipped to fewer than 10 million vehicles, Chrysler president James Press said yesterday in an interview, echoing a January 21 prediction by Michael DiGiovanni, the chief sales analyst at Detroit-based GM. Ford also raised that prospect yesterday. December's rate was 10.3 million and November's was 10.2 million, the lowest in 26 years.

Plummeting sales hamper efforts by GM and Chrysler to pare labour costs, cut debt, trim dealers and idle plants to reduce cash use and make a case to keep $17.4 billion in loans from the US Treasury that kept them from slipping into bankruptcy. The companies face a February 17 federal deadline for a progress report.

GM and Auburn Hills, Michigan-based Chrysler are offering cash and vehicle vouchers to entice more factory workers to leave and ended a 25-year-old programme that assured union employees most of their pay even when there weren't any tasks for them to perform. January had 26 selling days, one more than a year earlier. Some automakers release results adjusted for sales days, meaning the totals will be about four percent lower than unadjusted numbers. Bloomberg uses unadjusted figures.

Buyers shunned showrooms last month as shrinking payrolls sent consumer confidence plunging to the lowest in 42 years of record-keeping by the Conference Board. The Labor Department probably will say on February 6 that January non-farm job losses totaled 535,000, based on economists surveyed by Bloomberg.

Tight credit also is damping sales, said George Pipas, Ford's sales analyst. The Treasury Department provided a $6 billion bailout to GMAC LLC, the lender affiliated with GM, and $1.5 billion in loans to Chrysler Financial to help ease borrowing.