Here’s one new car shoppers won’t be reading on the home page at Kelley Blue Book. Via press release, the car guide’s boffins wonder what will happen when the federal government stops handing out free money to clunker-driving new car buyers. Unless the Cash for Clunker scheme is extended indefinitely (a possibility) and/or widened to include other types of vehicles (less possible but not improbable), the bubble she gonna burst. And then, bad things. Euphoria, meet reality.
Automotive News [sub] reports that the Senate has passed a $2 billion extension to the Cash for Clunkers program, extending the deal through Labor Day. President Obama has already said he would sign the bill. But will it help the taxpayer-owned auto firms that desperately need a boost? Will sales levels continue at their current surging rates? Will fraud stories start popping up as they have in Germany? Who cares. America loves a deal.
TTAC commentator Mark writes:
Mr. Farago, I’m an avid fan of your web site / blog. General Motors is a frequent subject, often in a negative light (typically, a well deserved negative light). I have owned and currently own GM vehicles. Why? My father worked for GM for 35 years, was paid well paid and has a good pension. GM helped put bread on our table, a car in our driveway and helped pay for my education. With all the issues and bailouts that GM has recently had, I would find it difficult to purchase another GM vehicle. What would sway me to purchase another GM vehicle? The company would have to change it’s philosophy and be accountable for the products they produce. Promote this via a marketing program centered on a specific model with the following four points:
The Insurance Institute for Highway Safety (IIHS) low-speed bumper repair data [download here] is good news for owners of the 2009 Honda Accord, Hyundai Sonata, Mazda 6 and Nissan Maxima: repair costs sank from 2007 levels. Moving beyond the headlines, the IIHS gives the Nissan a “poor” rating ($1,500 plus). And reports that the 2009 Chevrolet Malibu and 2010 Ford Fusion’s bumper repairs costs have soared. “Ford fit the Fusion’s front and rear with weaker bumper beams, and this had a big effect on the test performance,” IIHS Veep Joe Nolan’s PR flack writes. “The difference is easy to see in the 6 mph full rear test, which simulates a common parking mishap like backing into another vehicle. The Fusion’s bumper buckled, which caused it to underride the test barrier, resulting in twice as much damage as the 2007 model in the rear test. In the full front test, the Fusion had $2,529 in damage, more than any other vehicle.” Malibu misegos the jump.
In other words, TTAC commentator Stephen Teller has assembled a chart matching the amount of Cash for Clunkers money doled out per state, divided by population. [download here] Here are the top ten in reverse order:
10. Vermont – $3.82
9. Iowa – $4.06
8. Nebraska – $4.14
7. Maine – $4.14
6. New Hampshire – $4.16
The Toyota Corolla has overtaken the Ford Focus as the first choice for American consumers trading their government-approved clunker for a federally subsidized new whip. According to Department of Transportation stats, ToMoCo has now captured three of the top five slots on the Cash for Clunkers (a.k.a. C.A.R.S.) hit list (previous version here) : Toyota Corolla, Ford Focus, Honda Civic, Toyota Prius, and Toyota Camry. Or as, the official release puts it, “Four of the top ten selling vehicles are manufactured by the Big Three. Of non-Big Three purchases, preliminary analysis suggests that well over half of these new vehicles were manufactured in the United States.” Did they mention that the “foreign nameplates” are produced in the U.S.? They did not. Nor did they offer a similar analysis of the country of origin for the trade-ins. Guess what percentage of the Cash for Clunkers trade-ins are American brands?
Official Department of Transportation stats as of 4:00 p.m. on Monday, August 3, 2009.
Dealer Registrations:
Number Submitted – 24,238
Number Approved – 20,495
Dealer Transactions:
Number Submitted – 133,767
Dollars Submitted – $563.8 million
Hyundai and Subaru are beginning to be familiar faces near the top of the monthly “who’s losing least” numbers. Sure, everyone expected Hyundai to cash in on the clunker sales boomlet, but who’d have thought Subaru would log its best sales month ever? Tribeca was down for Subie, but everything else was up by 33 (Outback) to 41 (Impreza) percent. Forester is still the top dog though, at 7,574 units. That’s almost as much volume as Hyundai‘s Accent (+13 percent), which was part of the expected Hyundai clunker boom along with Elantra (+30 percent) and Sonata (+17 percent). Santa Fe barely moved at 6,793 units, but the Genesis is anemic at 2,015. Volkswagen sales fell just over one percent, buffered by TDI sales that made up 30 percent of total deliveries. 80 percent of Jetta Sportwagons and 40 percent of Jetta sedans are being chosen with oil-burner engines. Otherwise, VW sales look dreary. Nissan‘s sales (-25 percent) are distinctly “meh,” with only the Rogue (+4 percent), Versa (-2 percent) and Cube (3,293) looking remotely assertive.
Toyota‘s Yaris and Corolla models did not receive much in the way of a sales boost from the government’s cash for clunkers program, recording 36 percent and 14 percent declines respectively. Nor did Honda‘s Fit, which slid 28 percent to 8,876. Prius, however, did. America’s hybrid grew its sales by 30 percent compared to last July. It also creamed Honda’s competing Insight, 19,173 to 2,295. Prius alone now sells as well as Buick, Cadillac and Saturn combined. Hail to the king, baby.
Although GM’s sales are down nearly 20 percent compared to last July’s poor showing, your federally-owned General Motors is staying upbeat. More accurately, Mark LaNeve wants to keep his job (and, logically, the government cheese flowing).
Our performance is being driven by the outstanding products in our core Chevrolet, GMC, Cadillac and Buick brands. While still challenging, the market is firming and GM sales are still tracking ahead of what we projected in our reinvention plan. In July we are projecting our retail market share to exceed our year-ago performance. From great new products, like our Cadillac SRX and CTS Sport Wagon, Chevrolet Camaro and Equinox, to attractive financing and new leasing opportunities and to the Cash-for-Clunkers program that helps reduce the cost to buy a new vehicle — customers have unprecedented opportunities to get into a new GM car or truck. We anticipate an additional sales lift in August if Congress approves more funding for the wildly-popular Cash-For-Clunkers economic recovery program.
This is “sip Bacardi like it’s your birthday” news in Chryslerland. Seriously, big up yourselves, ChryCo. Single-digit declines in the house (if only when compared to last summer’s dismal showing)! Having paraphrased the monthly press release, let’s get down to the numbers, shall we?
Ford’s press release (PDF) makes no bones about the source of relatively high demand for its products. “The U.S. government’s Car Allowance Rebate System (“Cash for Clunkers”) enabled Ford to post the first sales increase of any major manufacturer in 2009,” is the word from Dearborn. And though Ford’s year-on-year sales for July did climb by 2.4 percent, July marks the first such increase since November 2007. Most of that growth came from Ford’s more fuel-efficient vehicles, as Fusion/Milan was up 66/60 percent, Escape/Mariner up 94/71 percent, Focus up 44 percent and Ranger up 65 percent. So, government-stimulated models aside, how are things looking for the Blue Oval Boyz?
AdAge reports that Chrysler is deep-sixing it’s “Double Ca$h” for clunkers ad campaign, some thirty days before the ads were due to expire. “We saw the spike in the interest and decided to change our direction,” a Chrysler spokeswoman told Ad Age. Chrysler is now switching to a “summer clearance” ad campaign. Huh? AdAge doesn’t explore the rationale behind the move, but here’s a couple of theories . . .
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.”
When it comes to federal teat suckling, Mark Tapscott’s got the inside line. I don’t mean Edmunds and I don’t mean he does it personally; Mark knows a lot about how the beltway boys reach into the taxpayer’s trousers to play pocket pool. So, while Tapscott joins the MSM (and TTAC) in announcing the bogus Cash for Clunkers program’s pre-mature hiatus, he’s out in front re: the C.A.R.S. program’s long term fate. Mark says the bill was secretly written with permanent marker. In other words, the billion dollar (for starters) Cash for Clunker boondoggle’s a keeper. The writer gives five—count ’em five!— reasons for car dealers to be perpetually cheerful about automotive euthanasia . . .
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