March 4 (Bloomberg) -- U.S. auto sales in February fell to a worse-than-expected rate and so low that the U.S. Treasury will face pressure to give more money to General Motors Corp. and Chrysler LLC or let them fail, analysts say.

Industry sales plummeted 41 percent last month to a 9.1 million vehicle annual rate, the lowest since December 1981, according to Autodata Corp. GM, surviving with the aid of government loans, reported a 53 percent drop.

At that level, nearly every automaker is struggling and GM and Chrysler, which are requesting $21.6 billion in additional loans from the U.S. government, said they likely will need it all. Additional government aid to keep the automakers out of bankruptcy is making less sense, because it has become difficult to project an end to the sales declines, said Stephen Spivey, an automotive analyst at Frost & Sullivan in San Antonio.

“If it stays contracted at this rate for a significant period of time, the bridge loans are being recalled and they are going into bankruptcy,” Spivey said yesterday in an interview after the sales results.

President Barack Obama’s automotive task force has been meeting with automakers, union officials and auto-parts makers about how to address the collapsing industry. The government already has committed $17.4 billion to GM and Chrysler. Both companies are working on a March 31 deadline to accomplish a restructuring plan that includes concessions from labor and lenders, or the loans can be called by the government.

The sales rate in February, below the 9.5 million average of 27 analysts’ and economists’ estimates compiled by Bloomberg, “implies the maximum amount of government aid -- if not more -- will be necessary” for GM and Chrysler, said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Massachusetts.

Unsustainable Levels

“These are obviously unsustainable levels which are causing almost every major auto manufacturer across the world to look for government aid,” Michael DiGiovanni, GM’s chief sales analyst, said on a conference call yesterday. He said February is the low point in the market.

Toyota Motor Corp. and other automakers previously seen as having solid financial footing cannot sustain a selling rate as low as February’s for a year or longer without laying off workers or taking more dramatic steps, said Spivey, the Frost & Sullivan analyst.

The 40 percent February U.S. decline for Toyota, the world’s largest automaker, was its biggest ever. Toyota, forecasting its first loss in 59 years, may ask Japan’s government for 200 billion yen ($2 billion) in loans for its credit unit as private financing has become too expensive, public broadcaster NHK reported yesterday, without naming its source.

Production Cuts, Too

Sales tumbled 48 percent for Ford Motor Co., 44 percent for Chrysler, 38 percent for Honda Motor Co. and 37 percent for Nissan Motor Co. GM said it plans to build 34 percent fewer vehicles in North America next quarter, and Ford announced a 38 percent reduction from a year earlier.

Ford’s plunging sales, hurt by a 55 percent drop in F-series pickup trucks, hasn’t changed the Dearborn, Michigan-based company’s stance that it won’t require U.S. aid, George Pipas, the company’s sales analyst, said in an interview yesterday.

Chrysler has scaled its factories to meet the lower demand and can operate at the low sales rate, Ron Kolka, the chief financial officer of the company, said in a call with reporters yesterday. Chrysler has a $4 billion loan from the government and has asked for $5 billion more.

The automaker’s efforts to negotiate with its banks about cutting debt by $5 billion have stalled as the lenders aren’t interested in discussing trading their secured position for equity, people familiar with the talks said.

Consumer Confidence

“At this point, it’s not as much credit as it is a consumer confidence issue,” Al Castignetti, Nissan’s vice president of U.S. sales, said in an interview. “Even if you can afford the loan, people are not willing to take on the risk right now because of concern about jobs.”

Sales of Toyota’s Lexus fell 38 percent, Bayerische Motoren Werke AG’s BMW dropped 38 percent and Daimler AG’s Mercedes-Benz declined 24 percent last month as the sagging U.S. economy crimped demand for luxury autos.

Annual U.S. sales of cars and light trucks averaged more than 16 million this decade. In 2008, they totaled 13.2 million, a 16-year low.

The Conference Board said Feb. 24 its measure of consumer confidence plunged to the lowest in 42 years of record-keeping.

U.S. employers probably shed 650,000 jobs last month, the most since 1949, according to the median estimates in a Bloomberg survey before the Labor Department’s March 6 report. The jobless rate for January was 7.6 percent, the highest since 1992.

GM’s February sales of cars and light trucks fell to 126,170 from 268,737 a year earlier, the automaker said. That included declines of 69 percent for Hummer, 59 percent for Saab and 57 percent for Saturn, three units the company is seeking to shed.

To contact the reporter on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.netAlan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: March 4, 2009 00:01 EST