While examining the plight of the domestic automakers -- GM and Chrysler (and to a lesser extent Ford) -- many blame inefficient designs from years past or the added expenses of the high union pay or benefits.  What many forget is the base reason why these companies are in such bad trouble -- cars just aren't selling.

After a miserable January and February, sales in March plunged again.  And it wasn't just domestic automakers either; sales of Toyota, Honda, General Motors and Ford all fell at least 36 percent for the month.  There were some small signs of hope -- all of companies posted small gains from January and February and all of them beat their forecast -- except for Toyota.

Auto sales are at their lowest levels in 27 years, but auto executives are still wary of saying that they've hit rock bottom.  But as GM and Chrysler LLC fight to avoid bankruptcy without their requested bailout loans, some of their employees took heart at the small bright spots in the bad news.  Mark LaNeve, vice president for GM North America vehicle sales states, "Maybe we're starting to...show some signs of life."

Emily Kolinski Morris, Ford's senior U.S. economist, in a conference call says that she believes that sales will bottom out in three to four months and then will climb again.  Still, Ford isn't counting on it -- its planned production remains in check well through the end of the year.  George Pipas, Ford's director of sales analysis says, "There's no point in trying to get ahead of ourselves."

Meanwhile the clock is ticking for Ford's competitors.  Chrysler has to try to negotiate a merger with Fiat LLC and GM has to massively restructure within 60 days.  If the companies meet these goals set out by the federal government, they will receive some assistance, though it appears that the assistance is a one-time offer and that the feds will not grant more bailout loans subsequently.  Both companies, while trying to fulfill these goals, are also preparing bankruptcy filings.  GM says there is a significant chance that it will go bankrupt by June -- just two months from now.

GM was hit worst by the March sales drop.  Overall its year-to-year sales dropped 45 percent.  However, its laggard brands -- Saturn, Saab and Hummer -- had much worse losses. Hummer sales dropped 76 percent. 

Ford was next worst-affected with a 41 percent overall drop and a whopping 73 percent drop in SUV sales.  Toyota Motors recorded a 39 percent sales drop, while its Japanese rival Honda saw a 36 percent sales drop.

The good news for Toyota and Honda is that they always have sales in their home nation to fall back on.  While sales in Japan have also been hit by the recession, Toyota and Honda enjoy a virtual monopoly on auto sales in Japan thanks to lack of dealerships and parts repair centers (in turn to a mix of government policies and public sentiment).  Sadly, for GM, Ford, and Chrysler they enjoy no such captive audience as their sales continue to plunge.