General Motors' (GM) vehicle sales were lower in the third quarter, lending credence to reports that the auto maker could be in need of Federal Assistance.

The auto maker says it sold 2.1 million vehicles in the third quarter, which represents a drop of 11.4% as compared with the same quarter last year.  Sales in the United States were particularly dismal, falling 18.9% compared with the same period last year.  European sales also dropped off, sinking 12.3% from the same quarter last year.

GM saw its only growth in emerging markets. Sales of GM’s Chevrolet brand vehicles were up 5% in the Asia-Pacific region, and 3.4% in the Latin America, Africa and Middle East region.

In addition to sagging sales, the auto maker’s financing arm, GMAC, has been slammed by the credit crunch.

The Wall Street Journal reported Wednesday GMAC would be granted access to the Federal Reserve’s short-term funding facility. Having the ability to borrow from the Fed would provide the company with crucial access to capital that has dried up as markets have tightened. 

GM is also looking for a piece of the $700 billion bailout, the Journal reported.  In order to participate in the bailout, GMAC would have to be granted bank holing status by the Federal Reserve.  Investment banks Goldman Sachs (GS) and Morgan Stanley (MS) were both given bank holding company status shortly after the collapse of Lehman Brothers.  

If GMAC succeeds in becoming a bank holding company, it could theoretically receive direct equity injections from the federal government, and have its debt temporarily backstopped by the Federal Deposit Insurance Corp, according to the Journal. In addition, GMAC would potentially be able to borrow from the Fed’s discount window, which banks generally utilize when they are unable to borrow from other banking institutions. This would helps shore up the ailing auto maker’s liquidity position, and provide it with even more access to much needed capital. 

The Journal, however, notes that GMAC would have to jump numerous hurdles before becoming a bank holding company.