Across the board, automakers announced that U.S. sales dropped severely in the month of March in the face of record high gas prices and concerns about economic stability.

General Motors Corp. (NYSE: GM) had sales drop by a staggering 19%, while both Toyota Motor Corp. (NYSE: TM) and Ford Motor Co. (NYSE: F) had sales drop more than 10% respectively. Not to be left-out, Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. also experiences declines, though much less severe.

This is certainly not totally unexpected – this is the 10th sales drop out of the last 12 month for U.S. auto sales, but what makes it surprising is just how large the drop was across even foreign carmakers.

Ford Vice President Jim Farley said, “I'd like to be able to tell you the worst is behind us but I can't really say that. The second quarter may be the worst sales period of the year.”

Though U.S. automakers weren’t alone in experiencing the sales decline, their share of the overall U.S. market is still decreasing compared to foreign makers. It is now estimated that U.S. companies have 48.4% of the U.S. market compared to 44.5% of the market for Asian companies. This balance will most likely continue to shift as more cars were sold than trucks last month for the first time since May last year – foreign companies tend to do much better in car sales than truck sales. This reversal reflects a renewed customer focus on fuel efficiency in the face of rising gas prices. Not only is this bad news for U.S. market share, it is also very bad news for profitability because trucks and SUVs are drivers of domestic carmakers’ profits.

“Market demand is more sedan-weighted, more to small cars,” because high gas prices force “people [to] rethink their vehicle choice and consider more efficient types Nissan North American VP Al Castignetti said.

Despite this positive trend for Asian manufacturers that tend to have more fuel efficient models, Toyota, Honda and Nissan are still experiencing sales declines. “We’re not immune to economic cycles and downturns in the automotive industry,” said Toyota’s brand division head Robert Carter. “We hope to sustain sales somewhere around the same level as last year.”

In this economy, when the world’s best positioned car manufacturer can only hope to sustain sales, investors should be wary of automaker stocks.

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