Reporting on the auto industry can be a bit difficult, these days, certainly if you're hoping to find something good to say. And the latest news is no exception.

Wrapping up the second quarter, General Motors announced a whopping $15.5 billion loss, the third-worst in its history, and nearly double the record loss reported by Ford Motor Co. barely a week before. Chrysler did announce it had found a way to set aside $1.1 billion during the first half of 2008, but that's about the only thing good the automotive arm of Cerberus Capital Management seems to have to talk about these days.

And to make sure prospects don't look any better for the months to come, industry sales numbers showed that the market is, if anything, getting worse, with automakers large and small collectively reporting what would, on an annualized basis, come in at barely 13 million cars, trucks, and crossovers. That's down from an industry peak earlier in the decade of more than 17 million.

Chrysler, in fact, posted the worst downturn of any of the major makers, a 28.8 percent decline for July, with GM close behind, at a 26.1 downturn. Ford was off 14.7 percent, but there was something positive to note there, with the ailing makers passenger car sales actually rising by 1.9 percent. The big downturn - no surprise - across the industry is on the light truck side, where even Toyota reported a 27.1 percent drop, compared to year-earlier sales of vehicles like the Tundra pickup and Land Cruiser SUV.

But even Honda, which has seemingly defied gravity in recent months, proved that Newton was right. The Japanese maker reported an overall 1.6 percent decline.

The one positive surprise? Nissan delivering an overall 8.5 percent increase in July sales, despite its continuing decline on the light truck side. High-mileage small cars, such as the Versa, have helped the Japanese marque gain traction.

And that's what analysts are hoping can put a bit of momentum back into the industry, as makers race to expand production of products like Versa, Honda's Fit, and Toyota's Yaris. But even though domestic manufacturers are shutting truck plants as quickly as possible and converting many to handle small passenger cars, the changeover won't be easy - or quick. The first American version of Ford's new Fiesta, for example, won't roll out a former F-Series plant in Mexico until the 2010 model year.

A slight reprieve in fuel prices could help August's numbers, some analysts believe. But few expect a resurgence in the truck market. And the overall slump in the U.S. economy, with surveys showing consumers expecting even worse, isn't going to help the auto industry.

Indeed, the lending crisis is actually worsening things for the auto industry. Automotive finance subsidiaries and traditional lenders alike are tightening credit and, in many cases, curbing or eliminating entirely the leasing programs that, in recent years, helped get millions of motorists out of used vehicles and into new ones.

"I'm really worried about keeping my doors open," one Detroit-area Lincoln Mercury dealer told me last week. About 80 percent of his business is leasing, noted the retailer, who asked not to be named. And if he can't offer those low-cost deals anymore, he doesn't expect to convert many of his struggling blue-collar customers to a traditional sale.

The leasing cutback could be felt across the industry. For most luxury marques, leasing accounts for 70-plus percent of their business. Yes, makers like Lexus and Mercedes-Benz have more affluent customers, but many of those are also stretching their budgets to stay in the luxury market. If makers are forced to retune leases to reflect financial realities, some products could see huge price jumps. And that could lead many potential customers - especially those coming back for new leases - to walk away.

There's clearly light at the end of the tunnel. But right now, nobody's quite sure when they're going to get near enough to the end of this downturn to see it.

Hard times are coming, predicts the world's largest automaker. Toyota - which captured the global sales crown from struggling General Motors during the first half of 2008 - has lowered its global sales forecast for the year, largely because it expects its first annual decline in the critical U.S. market in nearly two decades.

Last year, Toyota officials threw down the gauntlet when they predicted they would sell 9.85 million vehicles worldwide. At the time, most analysts responded by forecasting that would be enough to push the Japanese maker into the No. 1 slot. But no one counted on the slump in the U.S. and the general stagnation in many other developed markets, notably in Europe.

Now, says Toyota, it expects global sales to reach 9.5 million, this year, about 1 percent more than in 2007. But in the U.S. market, the company said in a brief statement, it will suffer its first sales decline in 17 years. When you combine the Toyota, Lexus, and Scion brands, volume is expected to total 2.44 million cars, trucks, and crossovers, compared with 2.62 million in 2007 - and the original, 2008 forecast of 2.64 million vehicles.

Toyota's 6.8 percent sales slump in the U.S. so far this year is complicated by a variety of factors. There's no question it has been hurt by the sudden, sharp decline in the American light truck market. The Japanese maker has ordered a months-long shutdown of its new Tundra pickup plant in San Antonio, and will pull additional production of the full-size truck out of another factory in Indiana. It has delayed the launch of a new plant that was supposed to build the Highlander SUV - but it will add production, there, of the popular Prius hybrid.

In fact, many analysts believe Toyota could be doing better in the States if it had more hybrids and small cars to sell. There are long lines waiting for the Prius in most of the country, and dealers typically sell the hybrid vehicles the moment a shipment arrives from the factory.

The U.S. isn't the only place Toyota is struggling. It is projecting a very small downturn in the home Japanese market for 2008. On the other hand, such slowdowns have been offset by robust demand in key emerging markets, including China, where Toyota has steadily been pushing its way into the top tier of import nameplates.

As my earlier blog suggested, there's not much good to talk about in automotive circles, these days. But occasionally, something positive slips through the whining and bitching. And in this case, the news comes from Ft. Lauderdale, Florida, home to the automotive mega-retailer, AutoNation.

In a truly rare bit of good news, the retail giant brought in better-than-expected second-quarter earnings, which, in turn, earned it an 11 percent surge in its stock price - even as the overall market took a tumble.

Now, before you wonder how AutoNation could defy gravity, it didn't. Its net income dipped 34 percent, year-to-year, to $51.8 million, or 29 cents a share, from $79.3 million, or 38 cents. But when you consider what's happening in the new car market, overall, that's downright miraculous.

And according to CEO Mike Jackson, things look as good as one could expect for the rest of what is likely to be a miserable year for the industry, thanks to planned cost cuts of about $100 million.

To some, it might seem almost anticlimactic. Maybe it should be to all of us. But surprise or not, General Motors, after suffering a 5 percent dip in its global volume, saw its sales for the first half of 2008 fall behind those of its archrival, Toyota Motor Co.

The two have been locked in a heated race for the last two years - GM beat out Toyota in 2007 by just 3,100 sales - but this year's sharp downturn in the U.S. market, particularly in the light truck segment, finally tipped the scales in favor of the Japanese giant.

From January through June, Toyota moved 4.8 million cars, trucks, and crossovers worldwide, compared with 4.54 million for the troubled U.S. maker - which only last week announced the latest in a series of sharp cutbacks that includes still more reductions in pickup and SUV production.

It wasn't all bad for GM. The automaker posted a strong 10 percent growth in overseas sales. Two of its traditionally domestic brands, Chevrolet and Cadillac, both did well abroad, posting double-digit gains.

But there's that troubled U.S. market, where overall industry sales plunged, last month, to their lowest levels in more than a decade, coming in at an anemic, annualized rate of 13.6 million, compared with the 17-million-plus levels of the early part of this decade.

And there are few signs things are going to get better anytime soon, lamented GM's chief sales analyst, Mike DiGiovanni. "Early indications" for July, he warned, suggest "it's going to be another challenging month."

GM isn't the only one suffering, however. Even Toyota saw a 7 percent decline in U.S. sales during the first half of this year, but it more than made up for that elsewhere, especially in emerging markets like China.

With all the news coming out of yesterday's big General Motors news conference, at least one significant topic managed to slip under the radar. And it leaves us wondering whether the increasingly downsized giant of an automaker will be walking away from its long-standing involvement in motorsports.

GM has traditionally been one of the most aggressive players in the global racing world, participating in series ranging from the NASCAR good ol' boy circuit to the sophisticated world of Le Mans endurance racing. But consider a comment made to employees by CEO Rick Wagoner:

"We will implement significant reductions in promotional and event budgets, motor sports activities and back-office expenses," said the CEO.

Considering GM is looking for ways to slash a hefty $10 billion in expenses by the end of 2009, it's not surprising that it might target the healthy motorsports budget. The latest turnaround plan has the automaker questioning just about every line item. For example, if GM traditionally exhibits 20 cars at its booth at the annual SEMA Show (the yearly gathering of the Specialty Equipment Marketers Association), might it be just as effective to bring 10 or even 5, asked Troy Clarke, president of GM's North American operations.

There's more than just budget cutting at work, however. Even if the automaker could dump as much money as it has in marketing and motorsports, Clarke said it would no longer be business as usual.

Consider two of GM's biggest success stories of this past year, the Chevrolet Malibu and Cadillac CTS. The automaker trimmed back on TV and other, traditional ad venues, using Internet, viral, and other marketing efforts that, Clarke explained, show "how we plan to go to market in the future."

And so, when it comes to racing, running an otherwise identical "race car of the future" with Chevy decals around Talladega just might not make as much sense anymore as it did in years past.

Few expect GM to drive away from racing entirely, but we could see a sharp cutback. And it could be echoed in reduced support for other sports sponsorships, such as Major League Baseball and professional golf, where Tiger Woods has become more recognizable as a symbol for Buick than the brand's own cars.