Now that Cash For Clunkers is over, the auto industry has a problem: Where will car sales come from now?Everyone who had an old car and wanted a new one took advantage of the Cash For Clunkers plan -- who is going to go buy a new car the day after the government stopped paying people $4,500 to buy cars?
J.D. Power and Associates reduced its 2010 sales forecast to 11.5 million units from 11.6 million -- citing the impact of Cash For Clunkers. In other words, a big part of what Cash For Clunkers did was borrow sales from the future and front-load them, and now there's nowhere to go for car sales now.
As CNBC reports, "While Cash for Clunkers may have proved there are still car buyers out there, it is unlikely the heavy demand will last. In fact, the big rush to car lots this month may have had the unintended effect of stealing sales from this fall and next year."
So here's where we are: We puffed up the auto industry for a few weeks by borrowing from the future to bailout the present -- sticking taxpayers with the bill, and creating an avalanche of bureaucratic skullduggery in the process.
And yet, unbelievably, it's still being hailed as a tremendous success by politicians and pundits.
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Reader Comments (Page 1 of 1)
8-25-2009 @ 3:35PM
Lauren said...
I work at Ford and this would have been a good program if it was thought through first.
1st - The Program should have been avaliable for american made cars only!!!! Why did we just give $4500 to Americans to buy Toyotas?????
2nd - The American car companies should have been notified so they could produce more cars before the Program started. That would have greated more jobs!!! And then Ford wouldn't have ran out of inventory during the program!
8-25-2009 @ 4:54PM
al coholic said...
Lauren,
Congratulations for working with Ford. Only your company had the foresight to prepare for this debacle.
Though it is frustrating to see Toyota benefit from this program you can at least feel better knowing that American workers will benefit from it since many of the cars sold were made in America by American workers.
In years past the buy American slogans were ignored because American cars were inferior. That is no longer the case. In my opinion Ford and GM cars are every bit as reliable and well made as the imports. Hopefully now people are geting the message and will buy American.
8-25-2009 @ 6:52PM
ij70 said...
Lauren,
Congratulations for working for the least incompetent of Big 3.
To your second comment. The C4C was presented to the Congress so the management of the automakers could not possibly be ignorant of the program. Congress debated it so there was time to gear up. Obviously neither administration nor management of the automakers expected the program to be this popular.