General Motors Corporation, the world’s biggest automaker, forecast its largest quarterly loss since 1992 as Toyota Motor Corporation takes market share in North America and near record fuel prices erode sales of sport utility vehicles.

GM, based in Detroit, yesterday predicted a first-quarter loss of $1.50 a share and slashed its estimate for annual profit by more than 50%. GM shares dropped 14%, the biggest decline since 2001, and bonds plunged as Standard & Poor’s lowered its outlook on the company to negative.

“General Motors North America is our 800-pound guerilla, and today’s announcement shows how important it is to get it right,” the chief executive, Rick Wagoner, who has led the company since June 2000, said yesterday in a conference call with investors.

The threat that GM’s credit rating may be cut to junk status sent investors scurrying for the safety of American Treasury bonds and pulled down American stock indexes. General Motors is the third-biggest corporate debtor and the sixth-largest employer in America.

GM bonds are already trading as if they’ve been cut to below investment grade, meaning the company may have to pay more to borrow money in the bond market. Standard & Poor’s rates GM bonds BBB-, one level above junk, and Moody’s Investors Service rates the company Baa2, two steps above junk. Moody’s yesterday said it is reviewing the ratings for a possible downgrade.

Ford Motor Company, the second biggest American automaker, said yesterday that its 2005 profit will be $1.75 to $1.95 a share, excluding some costs, affirming a January 25 forecast.

GM’s rising health-care and debt costs are combining with dwindling sales to push the company into a loss at a time when Toyota and Nissan Motor Company are taking away market share. American sales dropped 10% in the first two months of 2005 and sales of its largest SUVs declined 28% with rising fuel prices.

GM’s share of the American market fell below 25% this year for the first time since 1998, when a strike shut down much of its production. As recently as last year, GM executives sported lapel pins bearing the number “29,” indicating their market-share ambitions.

“They’ve decided it’s time to get the smiley face off and get some important business done,” said the chairman of the Center for Automotive Research in Ann Arbor, Mich., David Cole. “GM has decided that things are going to be tough, let’s make them real tough, and let’s get at some of these things that have been an anchor on their ability to function.”

The company had expected to break even in the first quarter and have a profit of $4 to $5 a share for the year, excluding certain items. The first-quarter loss may prompt ratings companies to cut GM’s debt to junk status as early as this year, said Argus Research analyst Kevin Tynan.

“This company simply has not performed,” said Mr. Tynan, who is based in New York. “The new products and the upcoming products really have not done the job.”

GM, which has $116 billion of outstanding bond debt, is facing increasingly higher interest costs.

The extra yield, or spread, investors require to buy the company’s euro-denominated debt instead of safer government bonds jumped, indicating investors perceive an increased risk in owning the debt. The spread on GM’s 8.375% bonds due 2033 widened 38 basis points, or 0.38 percentage point, to a record 494 basis points, according to Royal Bank of Canada prices on Bloomberg.

The company may be forced to suspend its quarterly dividend of 50 cents a share to stem losses, said a portfolio manager on a team managing about $2 billion of fixed-income investments at MTB Investment Advisors in Baltimore, Wil Stith.

The probability of GM making money this year “has gone down rather substantially,” Mr. Stith said. “They’re going to have to execute well on their new product lines.”

GM shares dropped $4.71, or 14%, to $29.01 yesterday in New York Stock Exchange composite trading, its lowest since November 1994. The loss would be the largest since the company lost $1.1 billion, or $1.86 a share, in the third quarter of 1992.

GM also said it now expects cash flow for the year to be negative $2 billion, a $4 billion decrease from the January 13 forecast of a positive $2 billion, as net income in North America declines, the automaker said.

The company said it still expects capital spending to rise about $1 billion from 2004 to $8 billion, according to the statement. The company is investing in American truck plants to get ready for the next generation large trucks such as the Chevrolet Suburban SUV and GMC Sierra pickup that begin to go on sale next year.