Oct. 20 (Bloomberg) -- General Motors Corp. U.S. dealers' profits may fall about 18 percent this year, while the automaker takes ``tough but necessary actions'' to secure its future, company executives told a group of the retailers.

``We will continue to take the tough but necessary actions to position the company, and you, for future success,'' Troy Clarke, GM's president for North America, said in a video from the meeting in Detroit last week. ``While no one can say exactly what the future is going to bring, you can be sure of this: General Motors is here to stay.''

Average annual dealer profits may drop to $199,000 a store this year, Doug Herberger, vice president of service and parts operations, said in another video. Bloomberg News obtained the videos, which were confirmed by Susan Garontakos, a spokeswoman for Detroit-based GM, in an interview.

The outlook for dealers at GM, the largest U.S. automaker, follows an 18 percent drop in the company's sales in its home market this year through September, more than the industry's 13 percent decline. For October, the industry's seasonally adjusted annualized sales rate has been about 12 million vehicles, the lowest since 1982, Clarke told the dealers.

U.S. industry sales fell 27 percent last month, the biggest drop since 1991, as the credit crunch reduced loan access for customers. Automakers already had been hurt by gasoline prices that surged to a record high in July, which crimped demand for the larger pickup trucks and sport-utility vehicles sold mainly by GM, Ford Motor Co. and Chrysler LLC.

Evaluating Options

GM is running advertisements emphasizing the availability of credit after GMAC LLC, the finance company owned 49 percent by the automaker, set lending limits that exclude about 42 percent of U.S. consumers. GM is considering asset sales and cost cuts to boost access to funding by $15 billion by the end of 2009.

``We are evaluating all of our options all the time,'' Clarke told the dealers.

GM is considering a merger with Chrysler, owned by Cerberus Capital Management LP, people familiar with the talks have said. Clarke made no mention of Chrysler.

Last week, GM began distributing financial data on its Hummer SUV division to potential buyers. The automaker is also considering revamping the unit.

While U.S. sales are ``plummeting,'' emerging-market growth is providing for investment in North America, Clarke said.

`Make Your Business Better'

``We've got to try to make our business better for us and for you,'' Mark LaNeve, GM's North American sales chief, told dealers in one of the videos. ``You've got to make your business better.''

The company and its dealers need to find ways to increase profit and market share for GM's cars and car-based SUVs, LaNeve said, without providing specifics.

Dealers should consider keeping service operations open longer, particularly on Saturdays, Herberger said. Compared with competitors, Chevrolet outlets are open an average of five fewer hours a week and Cadillac's are open seven fewer hours, he said.

``When things are good, the back end pays for the bills,'' said Herberger, referring to dealerships' service operations. ``When things are bad, it may keep your store open.''

As a percentage of profits at GM dealers, service operations represent about 90 percent this year on average, an increase from 46 percent in 2004, Herberger said.

GM gained 10 cents to $6.53 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 74 percent this year, the most among the 30 companies in the Dow Jones Industrial Average.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: October 20, 2008 16:17 EDT