Our UK readers my be interested to learn that the Obama administration has introduced a rival to Postman Pat: Preliminary Pat. “The White House Council of Economic Advisers gave the [Cash for Clunkers] program a preliminary pat on the back Monday,” The Detroit News reports. “Saying it created or saved 21,000 jobs in its short, four-week life by forcing automakers to boost production and add shifts.” That, however, is not our money shot. A little wood, please, as the Council addresses the question of whether or not C4C simply bribed buyers to buy earlier than they would have. Stimulating new car sales but not actually increasing them. The Council admitted the possibility, but wasn’t fussed. “This time-shifting is valuable if the economy is in recession because the economy is likely to be closer to full employment in the future.” All the birds are singing, and the day is just beginning. Pat feels he’s a really happy man.
VW has dreams of moving 150,000 Porsches per year by 2012. Meanwhile, Stuttgart’s finest is struggling with a nightmare market. Porsche spokesman Tony Fouladapour told TTAC that the automaker’s franchised dealers are now holding more than a 100 days’ worth of 911s, Caymans and Boxsters. (That’s up from the 92-day supply reported by Automotive News for August 1.) Not to mention the 100 to 150 box-fresh units already heading stateside. Responding to the glut, Porsche’s pulled 2010 inventories from all their dealers’ websites; some 273 Porkers have disappeared into the ether. Or is that from the ether? Either way, Porsche’s hit delete on all but a few ’10 special editions (e.g., the GT3 and Cayenne S Transsyberia). When will the 2010s return to cyberspace (or any other marketing venue)? “When the inventory situation improves.” To that end, the brand’s launched “The Porsche Moment”: 1.9 percent financing. [Thanks to The Comedian for the heads-up.]
Just kidding. No zombie watch for the Cash for Clunkers (a.k.a. C.A.R.S.) program, even though it’s already burned through one life and two dealer deadlines. Automotive News [AN, sub] reports that Uncle Sam’s extended the dealer deadline again, thanks to ongoing computer problems. Transportation spokeswoman Jill Zuckman “didn’t specify a particular time for the deadline, and said it depended on how long it would take the government to get the clunkers Web site up so that dealers could file claims.” While the boffins sort that out, more “issues” are arising. As of early Monday morning, dealers submitted 635,186 claims worth $2.65 billion in rebates. Although AN says the number puts the payout “close” to the $3 billion limit, C.A.R.S. may already be over budget. Add up the administrative costs and the rebate requests “stuck” in the system, and the question arises: what happens to those deals that may arrive once in a lifetime, after the money’s gone? Meanwhile, a group of dealers is keeping its “shadow” Cash for Clunkers plan going . . .
The Cash for Clunkers program is finishing its final weekend. By all accounts, the program has been a tremendous success, driving traffic back into tumbleweed-strewn showrooms, helping to cool the planet and reanimating idled automobile factories. Well, not by ALL accounts. The Wall Street Journal leaves no word unminced in its evisceration of the C.A.R.S. program: “The idea that a temporary subsidy program will launch the auto industry onto some new, higher sales and production plane defies logic.” As we shall see—or not—come September. Meanwhile, the media’s fixation with the NHTSA’s inability to send dealers rebate checks within a few weeks defies logic. For one thing, dealer ineptitude. For another, the NHTSA had three weeks to set up [what turned out to be] a $3 billion program. And lastly, it’s the federal government. What did anyone expect? Prediction: the dealers will get their money, the industry will gloat over August’s sales figures, and then it’ll be back to non-business as usual, until the housing market recovers. Whenever that is.
TTAC commentator Holydonut shares some of his time with us:
I don’t know if you’ve tried out the Google Trends tool to see search and news activity on google.com for some auto-related searches. First: I just put in GM, Chevrolet, Chrysler, Toyota, and Nissan to see their trends [click here]. And another fun one . . . I compared searches of “gas prices” and “mpg” to some automaker names [click here]. I filtered the lists to show only USA region searches. Searching for “Ford” is misleading since the name is so common that you get several non-auto “Ford” topics all mashed together. If you go global, then Toyota and Honda become regular names of people, so it over-states the results as well. But for the selfish USA-only view, it seems mostly valid. Unfortunately this also means comparing a search for HUMMER versus Prius is invalid. The rankings themselves against each other aren’t very relevant, but the fun stuff lies in the change of the changes in the trend due to known events. Some interesting takeaways:
GM’s experiment at selling cars in California on eBay has logged 45 sales in its first nine days, reports Automotive News [sub]. After announcing the program to considerable hype, GM is giving initial results a cool reaction. “It’s way too early in the program to have any concrete understanding of what’s going on,” say spokesfolks. No wonder they’re a bit confused: the eBay experiment received 630,000 visits and more than 960,000 searches of listed vehicles in its first week. “I’ve sold some vehicles to people that saw the vehicles on eBay, but they didn’t buy them on eBay. They called, came in and bought them,” says one dealer. Still, without a number to quantify the amount of leads that generated sales, it’s hard to point out the program’s redeeming qualities. Especially considering that GM didn’t receive a single offer for a vehicle at its listed price. Which means either GM or its dealers are missing out on profit on every vehicle sold through the eBay listings.
TTAC commenter bumpy ii has compiled another spreadsheet (XLS format) of monthly sales goodness for your data diving pleasure. This time it’s ten years worth of monthly Hyundai sales by nameplate. See how the Elantra/Sonata combo has carved out a giant chunk of the midsized sedan market. Check out the rise and fall of the Tiburon. Puzzle at why Hyundai ever wasted its effort on the Azera. It’s data-tastic!
After months of “deeper, harder, faster” cuts, GM is increasing its production numbers again. “We want to run lean, but we’re way too lean right now and we’re going to miss sales unless we put some production in,” explains GM sales honcho Mark LaNeve. He tells Automotive News [sub] that output will increase 35 percent in the third quarter to 535k units, and “at least” a further 20 percent in the fourth. “And it’ll probably go up from there,” says LaNeve. “Our dealers are clamoring for more vehicles in every segment.” Camaro, Equinox, SRX and Buick LaCrosse are said to be in especially short supply as GM’s nationwide inventory hit 360k units. Though much of the inventory shortfall is the result of Cash for Clunkers, GM’s cup-o-optimism runneth over.
The latest stats from the Department of Transportation reveal that Toyota has replaced General Motors at the top of the cash for clunkers (a.k.a. C.A.R.S.) program. The Detroit News reports that “Toyota has sold 18.9 percent of vehicles purchased through the clunkers program, surpassing GM, which has sold 17.6 percent . . . Detroit’s three automakers sold 42.1 percent of all clunker replacements, which is down from an initial 47 percent of sales — and slightly below the automakers’ 44 percent U.S. market share.” GM responded to the news by saying that while it appreciated the taxpayer’s help in driving demand, it was focusing all its energies on long term, sustainable growth. Just kidding. Spokesman Greg Martin told the DetN that “The sales will be a lot like the weather in Michigan in the springtime: It will change at any given time.” [Note to Greg: check your calendar.] ToMoCo was down with that . . .
Toyota President has renounced his firm’s 2002 goal of attaining 15 percent global market share by around 2010. “Our president doesn’t feel comfortable upholding figures as our vision,” an anonymous Toyota source tells Automotive News [sub]. “It is not the Toyota way to aim for 15 percent or 10 percent.” Which makes sense, considering Toyota is predicting a nearly 13 percent drop in global sales in the fiscal year ending March 31. Indeed, AN’s source blames the market share goal for Toyota’s current overcapacity struggles. Which indicates that the big T may have recognized the role of number-chasing in GM’s demise. If nothing else, its executives certainly understand the importance of emerging markets in driving sales. Perhaps because Volkswagen is creeping up on Toyota’s market share on the back of its Chinese and Brazilian business. You gotta dance when the floor keeps getting hotter.
At some point, maybe even soon, gm.ebay.com will be up and running. For some reason, the GM – eBay program—highly touted by CEO Fritz Henderson on the day of GM’s re-emergence from bankruptcy—only runs from August 11 (tomorrow) through September 8. So we should expect to see the main site go live at what, midnight? Thankfully, at least in some sense of that word, chevrolet.ebay.com (and the Buick, GMC and Pontiac-related url) is go. Ish. “Our Best Cars. Your Best Offer” doesn’t sound right to me. Shouldn’t that be OUR best offer? And what’s with Pontiac inclusion in the boondoggle? Anyway, what will we see when the curtain goes up?
The autoblogosphere is abuzz with debate over the Department of Transportation’s (DOT) list of the top ten Cash for Clunking vehicles. To say the least. Edmunds [via CNN] reports that the DOT counted vehicles EPA-style, tallying differing powertrain or drive wheel combinations separately. For example, the DOT rates a Ford Escape with two wheel-drive as a distinct model from a Ford Escape with all wheel-drive. If you’re Edmunds (or any one else with an ounce of common sense), you combine all the model variants’ sales totals into one stat. And if you do that, you get a horse of a different color. The implication making the rounds: the DOT manipulated the data to hide the fact that a brace of SUVs and pickup trucks made the top ten; the Cash for Clunkers program is supposed to be about saving the environment. Yes, well, high margin pickup trucks offer the best chance of saving the domestics. So, let’s compare the DOT list (as of August 7) with Edumunds’ take . . .
Never one to miss a chance to put a left/right slant on, well, anything, today’s New York Times contains an editorial claiming that the Cash for Clunkers (a.k.a. C.A.R.S.) program is a triumph of the Obama administration over Republican naysayers/hypocrites/rat bastards. Blogger Timothy Egan begins by suggesting that C4C is a Republican-style economic stimulus thingie, then excoriates the elephant party for not loving it long time. “They hate it, many of these Republicans, because it’s a huge hit. It’s working as planned, and this cannot stand. America must fail in order for President Obama to fail. Don’t be surprised if the tea party goons now being dispatched to shout down town hall forums on health care start showing up at your car dealers, megaphones in hand.” Incendiary much? I’ll have mine with a side order of sarcasm, please. “But try to give struggling families a one-time boost to buy a more fuel-efficient car, with an amount that wouldn’t pay for paper clips at A.I.G., and it’s . . . outrageous!”
Your Shitty Economy (YSE) Car of the Week: the 2005 Lexus LS430. The LS has to be one of the most boring cars in the biz. To paraphrase Jonny Lieberman, grab the wheel and you’re driving Muzak. Handling, sportiness and excitement are as far from the LS430’s vocabulary as Hungarian is from Creole. But even enthusiasts can respect the LS’s superb NVH engineering, which make it one of the best interstate cruising cars on the market, period. The LS’s exterior styling apes the 1990s Mercedes S-class—in the sense that a used bar of soap apes an identical new one. With Toyota parts bin pieces littering the interior, everything fits and we’re finished. Small prices to pay for understated elegance and supreme reliability in the best Cadillac Cadillac never built. Go ahead, ditch the new Camry and treat yourself to this certified LS for only $24,995. Note: narcoleptics need not apply.
Car dealers know a good environmental policy gimmick when they see one. Some 60 dealers (so far) have banded together to launch a new official-looking program that offers consumers between $500 and $4,500 of “incentives” for their used or . . . wait for it . . . new car. Welcome to autostimulusplan.com world! Automotive News [sub] tries (and fails) to adopt a suitably cynical tone for the story. “The dealer program is less restrictive than the government’s. For example, it allows shorter leases than the 60-month minimum required by the clunkers plan, and there’s no limit on the price of the new vehicle; the government program sets a $45,000 cap. A qualifying trade-in must be a 2006 model or older and must have been owned by and registered to the same person for six months. The dealer program requires a buyer to purchase a replacement vehicle with 2 mpg better fuel economy.” Or, you know, maybe not (nudge nudge, wink wink). You want fine print? They got fine print!
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