These are very, very tough times and news about the auto industry (and the newspaper industry) just keeps getting worse.

With the economy teetering on recession, if not already in one, high gas prices and now the fiscal crisis on Wall Street resulting in tighter lending standards, dealerships are really struggling.

Just how much is reflected in a couple of dramatic developments this week:

First, the nation's biggest used-car dealer reported profits down 78 percent in its second fiscal quarter ended August 31;

Second, the nation's biggest Chevrolet dealer closed its doors.

Richmond, Va.-based Carmax Inc. cited a slowing economy and reduced lending by third-party financiers for its dramatically lower earnings, down to $14 million from $65 million a year earlier, according to The Chicago Tribune. Sales were off 13 percent.

"The rising turmoil in the credit markets and virtual shutdown of the securitization market complicates the company's future funding strategies," the Tribune quoted Rex Henderson, an analyst at Raymond James & Associates in St. Petersburg, Fla., as saying.

Meanwhile, Columbus, Ga.-based Bill Heard Enterprises Inc., the world's top-selling Chevrolet dealership group and the 13th largest U.S. dealership with 2007 revenues of $2.13 billion, closed the doors at its 13 stores today, according to Automotive News.

It said high fuel prices, canceled short-term loans from GMAC Financial Services, a reliance on sales of pickups and SUVs, a soft national economy and struggles in local markets had troubled the company, which on Sept. 12 closed its store in Scottsdale, Ariz.

"The company had worked to develop and implement a strategy and a course of action that would enable it to operate successfully," Heard said in a statement cited by the industry newsletter. "However, the conditions necessary to sustain the business through the current challenges were not present."

And the scary thing is that we are still very much in the tunnel with no light even visible.

- Peter C.T. Elsworth