The shares of General Motors registered a downfall to their lowest mark in over 53 years, raising concerns regarding the future of the car maker. A warning for General Motors came from the investment bank Merrill Lynch, which said that the company might become bankrupt and that it needs to raise funds.

The company's sales fell down critically due the fact that consumers from the United States decided to save on spending and high cost for the fuel, switching to cars that are smaller and more cost-effective. The company's shares hit $9.96, before they closed down 15 percent at $9.98 on Wednesday, July 2. Such share price is the lowest since September 1954, the period when the GM stock fell down to $9.92.

Until now the prices of the company's shares registered a 60 percent downfall and according to the predictions of Merrill Lynch, the prices for the company's shares may fall even further.

"We believe there is potential downside in the stock below $7 and that bankruptcy is not impossible if the market continues to deteriorate and significant incremental capital is not raised," outlined analyst John Murphy. It is worth mentioning that earlier the specialists at Merrill Lynch predicted that the value of car maker's shares would reach $28.

One of the experts from Burnham Securities, David Healy, expressed less pessimism regarding the down falling prices of GM's shares. "My own opinion is that they're unlikely to file for bankruptcy. But the conditions in the auto industry are so tough for everybody right now, especially for GM, and that's why people see this as plausible," Mr. Healy said.

In comparison with June 2007, General Motors faced a significant fall of its shares by 18.5 percent in June 2008. The results of GM were still better than most experts expected. In addition it would be interesting to note that the fall of sales of one of GM's rivals Toyota fell by 21.4 percent.

It's worth mentioning that nearly all major car makers registered a shift in consumer demand, customers willing to switch from SUVs and light trucks to cars that are smaller and more efficient, due to the continuously increasing costs for petrol. In June, officials from General Motors announced that the company is going to close some of its plants located in North America and Mexico that build trucks and SUVs. One of the company's rivals, Chrysler, announced that it would close one of its minivan-producing factories. In addition, Ford's officials stated that the company performed a great cut in production.