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DETROIT -- Banks cut automaker ratings, oil climbed to a record high, and stock prices in the auto industry plummeted on Wednesday.

General Motors shares closed at $9.98, their lowest close in more than 50 years after a Merrill Lynch analyst said bankruptcy is "not impossible" for the world's largest automaker if the U.S. auto market continues to slump.

After dropping to a low of 9.96 in late afternoon trading, GM shares ended the day on Wednesday at 9.98, down 1.77 or 15 percent.

Ford Motor shares fell to a 52-week low as several Wall Street banks, including Citigroup, today joined Merrill Lynch in downgrading automakers and parts suppliers and lowered their outlook for U.S. auto sales this year and next.

Shares of Ford fell to as low as 4.36 before closing at 4.39, down 32 cents or 6.84 percent.

The price of crude oil reached a high, exceeding $144 a barrel before finishing at a record $143.57.

The following auto companies dropped to 52-week lows at some point on Wednesday:

Suppliers

• Magna International Inc.

• Lear Corp.

• Visteon Corp.

• American Axle & Manufacturing Holdings Inc.

Dealership groups

• AutoNation Inc.

• Sonic Automotive Inc.

• Group 1 Automotive Inc.

• Asbury Automotive Group Inc.

• Lithia Motors Inc.

GM downgraded

Shares of GM fell after Merrill Lynch analyst John Murphy said in a research note that he cut the company to "underperform" from "buy."

Murphy also wrote that GM must raise about $15 billion in cash to shore up liquidity and lowered his price target for the automaker to $7.

Other analysts have suggested GM must raise funds to ride out the downturn in the U.S. auto market through 2009. But Merrill Lynch's estimate of GM's financing requirements is the highest. It also carried the starkest warning of bankruptcy risk.

"The recent extreme deterioration in volume and mix is driving much higher cash burn and eroding GM's cash position," Murphy said. "We believe $15 billion is necessary because there is downside risk to our current estimates and a greater cushion is essential."

GM declined to comment directly on the Merrill Lynch report. GM spokeswoman Renee Rashid-Merem told Reuters, "If conditions continue to deteriorate, we would consider other operating measures."

Analysts' outlook dims

One day after industrywide sales dropped to a 15-year low in June, several analysts slashed their sales forecasts for the rest of the year. Some said they don't expect recovery for several years.

Total U.S. light-vehicle sales in June were down 18.3 percent from a year ago. For the first six months, sales fell 10.1 percent from the same period a year ago.

For the third time this year, Merrill Lynch's Murphy lowered his forecast for 2008 U.S. industrywide light-vehicle sales and said the drastic decline in sales would likely continue through 2009.

He expects 14.3 million U.S. auto sales this year and 14 million units for next year. That compares with 16.15 million units in 2007.

Citigroup analyst Itay Michaeli lowered his forecast for 2008 U.S. vehicle sales to 14.5 million units from 15 million, saying plummeting resale values of trucks and SUVs were crimping demand already hurt by a weak housing market and tighter credit. Michaeli said a full recovery in the U.S. auto market would begin only in 2010 or 2011.

He said GM must weather the downturn with considerably less backup liquidity than smaller rival Ford, which tapped the leveraged-loan market at its peak in late 2006 to raise $23 billion.

"While we do not believe GM is facing an immediate cash crunch, the urgency to shore up liquidity to navigate through a difficult 2008-2009 has risen significantly in recent months," Michaeli said. He cut GM's target price to $14 from $21.

Industry tracking firm Global Insight cut its forecast for the annualized sales rate in July to 14.4 million units and cut its 2009 forecast to 14.2 million sales, citing the risk of higher average oil prices in the months ahead.

Reuters contributed to this report.