New York - The world automobile industry is being seriously hit by the current credit crisis, with manufacturing giants Ford and General Motors (GM) singled out as facing difficulties financing their operations, reports revealed on Friday.

According to the report, which appeared in the New York Times, GM and Ford have been hit by the perfect storm of diminished cash flow due to falling sales and an inability to raise funds in the credit crunch.

The stock markets are taking their toll of GM and Ford, the shares of which fell Thursday - according to the Times - 31 and 21.8 per cent respectively. In addition, the car companies are seeing a domestic market that is shrinking by as much as 16 per cent, according to some analysts.

The report further said that both companies were "burning through" as much as one billion dollars in capital reserves monthly just to maintain operations.

While the management of both firms have said that bankruptcy is out of the question, the firms are said to be looking into restructuring. Options mentioned include selling corporate divisions, such as GM's Hummer, or off-loading non-productive assets such as buildings. GM was said to be attempting a massive 10-billion-dollar cost saving package.

Other car manufacturers also mentioned as experiencing difficulty included Toyota Motor and Honda. Both companies have, in general, produced more consumer-friendly vehicles in terms of expense and fuel efficiency.