Automotive News [sub] reports that the House of Representatives has passed a measure to inject another $2 billion into the CARS program, extending it to September 2010. The bill passed 316-109, and now moves to the Senate. There it could face a challenge from Senators led by Dianne Feinstein and Susan Collins, who argue that an extension must include measures to improve the environmental impacts of the bill. Feinstein has requested a full accounting of the measure’s alleged success from the Department of Transportation. Politico reports that Senator Claire McCaskgill has already ruled out support for any transfer of stimulus money to the CARS program. “It will be tough sledding in the Senate, but this would give it considerable momentum,” admits one auto industry source. “It’s not new money, so [it] should be more possible to get GOP support.”

If the CARS program has proved anything, it’s that America loves a deal. Big surprise there. In fairness, it also proves that giving away a billion bucks takes more than 30 days of preparation. And that good news is always welcome, even if it isn’t exactly good news. In the short term, the “success” of CARS is almost certain to bring about a re-up in funding; Cash for Clunkers will probably keep rolling along. In the longer term, there are two major issues to worry about. First, is the pull-forward effect. Redlining the market with federal stimulus will probably only delay a sustained and sustainable recovery in car demand. The second issue is that when the economy starts showing signs of sustainable, organic recovery, taxes are most likely going to be increased thanks to short-term stimuli like C4C. As the second most expensive purchase in a consumer’s lifetime, cars are likely to be especially vulnerable to reductions in take-home income. Doubly so if demand has already been pulled forward by said stimulus. With Cash for Clunkers, we are once again mortgaging long-term market stability and recovery for an orgy of feel-good consumption. Let’s try to enjoy the buzz while it lasts.

Physics Central’s Buzz Blog reports on a study which shows that breaking the rules can be the best way to help keep traffic flowing. The study by Sweden’s Umea University modeled traffic composed of “normal” pedestrians and “rule breakers,” finding that when over 60 percent of traffic consists of “rule breakers” things actually move more efficiently. “The interesting finding is that if most of the people are law-abiding, and you have a certain amount of people who are breaking the rule, then you are actually getting the minimum chance of a [traffic] jam,” says one of the study’s authors. Exactly following the rules of the road can cause traffic to build up behind a single negligent driver (who hasn’t seen that happen), and often the jam is only relieved by a driver breaking the speed limit to pass. Of course, there are other studies coming out which indicate that higher speed limits lead to higher death rates, but death only hurts for a few seconds. The pain of being stuck in a jam of mindless motorists can feel like an eternity.

The Freep reports that Congress could “shift $2 billion from an energy loan program” to replenish the maybe-tapped-out, maybe-not CARS program. This has been confirmed by the AAM’s Charles Territo who tells us that “HR 3435, would allow the President to transfer $2 billion dollars from previously appropriated Recovery Act funds in order to fund the CARS Act. Will be voted on today.” The plan is being spearheaded by the White House and Michigan’s congressional delegation. The House will vote on the extension today, the last day to do so before Summer recess. The Senate will remain in session into next week, but C4C faces more opposition there from the likes of Dianne Feinstein. Meanwhile, has round one even been used up?

(Read More…)

Well that was quick. The Freep is reporting that CARS will be suspended after only 4 days due to over-subscription. NADA is warning the Wall Street Journal that demand is quickly exceeding the $1 billion available. An unofficial NADA survey shows 25k qualifying deals that the NHTSA still has yet to process. And dealers sound pissed. “Their capacity to accept the applications is not adequate,” one dealer tells the Freep. “Dealers are spending all day trying to submit the applications . . . I have not spoken to one dealer that has received approval, and or has been funded, for even a single transaction.”

Do you have a vehicle that was eligible for the government’s CARS program until the EPA revised old mileage averages? If so, your vehicle is no longer eligible for the $3,500-$4,500 incentive. If you had set up a deal before the final rule came out, however, the government will hook you up regardless. “We’ve tried to come up with the fairest possible solution under the circumstances,” CARS’ long-suffering spokesman, Rae Tyson, explains to Automotive News [sub]. But it’s hard to see what exactly is fair about that. Didn’t NHTSA specifically warn that “if a dealer chooses to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule”? Why are the folks who ignored the warning being rewarded, while those who waited for the rules get the shaft? More importantly, if anyone got away with engine-melting a 1987 Alfa GTV (recently reprieved by the EPA mileage mulligan), there are going to be phones ringing in at least one congresscritter’s office. Hit the jump for a complete list of clunkers which saw their eligibility change due to the EPA revision.

(Read More…)

Auto Motor und Sport picks up on a report in De Telegraaf about a wave of anti-Smart vandalism that’s sweeping the city of a thousand “coffee shops.” Apparently, Amsterdam’s police force has been forced to post patrols around the city’s many canals in an attempt to curb the latest “weekend sport”: Smart tipping. The extent of this European version of cow tipping is unclear, although Amsterdam’s Smart Center reports “a number” of incidents. Apparently, the fact that the diminutive city cars park facing canals (instead of parallel parking like everyone else) makes them especially vulnerable. However Dutchamsterdam reports that the vandalism is not exclusive to Smarts. “In recent years vandals have also targeted other small vehicles, including scootmobiles and tiny cars from the Canta brand — both used primarily by people with handicaps and limited mobility,” is their analysis. Finally, a use for all those damn Neighborhood Electric Vehicles!

Thanks to ohsnapback for the tip!

Seriously? If Alfa and Fiat are going to be added to the Chrysler/Dodge/Jeep mix, something has got to give. And why not Chrysler? Maybe it’s just that every time I hear the word Chrysler, my immediate association is Sebring. Which is more than enough motivation for me to wish the brand dead. Perhaps the Chrysler name could live on as an umbrella brand (i.e., GM). As a vehicle brand though, Chrysler is toast. Or am I missing something?

“We’ve gotten thousands of thousands of questions regarding issues that Congress never dreamed of,” admit NHTSA spokesfolk to the NY Times. Say it ain’t so! The latest clunker stumper is the issue of gray market imports, which do not have official EPA ratings. When the Gray Lady’s Christine Negroni asked NHTSA if her gray market 1985 Mercedes 230E would qualify for a CARS rebate, the answer was likely accompanied by a heavy sigh. “It’s a question of determining if there’s a comparable model being sold in the U.S. that can determine fuel economy,” explains NHTSA’s Rae Tyson. “Our lawyers are going to have to make a decision.” Meanwhile questions like this have flooded the CARS hotline with some 45,000 calls. Not that calling the hotline would help with the gray market question. “If the question has stumped me, it’s going to stump the hot line too,” says Tyson. “It’s going to require an interpretation that we’re not equipped to make right now.”

Well, possibly more compelling. But first the sale. “I think that we’re past midfield with GM. There are always issues that you have to deal with, but I think we’re progressing well,” Roger Penske tells Automotive News [sub]. The bad news is Saturn’s rebirth isn’t going to be as simple as loading a boat with fun, quirky, never-before-seen-on-these-shores foreign cars and slinging Saturn badges on them. And while the details are being worked out (just how foreign and how quirky are we talking?) Saturn will be doing business as uninspired, uh, usual. “Under the terms of the tentative deal between GM and Penske, the automaker would supply Saturn with Aura sedans, Vue SUVs and Outlook crossover vehicles until at least 2011,” reveals AN. Epsilon, Theta, Lambda, oh my! Saturn hasn’t so much been saved as it’s been frozen in time. And Roger Penske won’t even discuss Saturn’s post-GM future. It looks like Saturn’s dealers are going to have to curb their enthusiasm just a little bit longer.

[Hat Tip: Jalopnik]

Reader chris (who apparently missed Farago’s declaration of the end of wagons in today’s podcast) writes:

Hi, I’m looking to purchase a used wagon for under $25K. It should have good reliability/quality, be full size, meaning good back seat room. I don’t like SUVs for their poor handling ang gas consumption. I’ve looked at volvo V70 (back seat too tight), Saab 9-5 (reliability is questionable on pre 2006 models, the later models are a bit more money). I’ve looked at the VW Passat, couldn’t stand the around town throttle control/drive-ability. The 2005 or so MBs E320 have issues with relieability and goofy electronic brakes that are defect prone after a few years. The Suburu Outback is too small in the rear seat, (and gutless). The Audi A6, is too exensive and reliablity is again questionable prior to 2006 models. VW Jetta, too small. What else is there??

Unlike the Subaru Outback, which doesn’t do anything for Legacy wagon fans, today’s TTAC podcast really does have something for everyone. And coincidentally, the ability to be all things to all people also happens to be the major challenge for mass market brands. Which is why Messrs. Farago and Niedermeyer agree that Ford should embrace its “built Ford tough” tagline, and use it to build the Ford brand across every segment. The line is well-established, it is associated with one of Ford’s most successful products, and, most importantly, it conveys a powerful but versatile brand image. In the past, we’ve wondered aloud about what exactly a Ford is supposed to be. Built Ford Tough could apply to a cheap Fiesta as much as it could to an upmarket Taurus. It’s an all-encompassing value that anyone, if not everyone, can relate to.