By on August 14, 2009

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 . . .

“The jury is still out” on what company finishes first in sales, [Toyota spokesman Mike] Michels said. “There are a lot of variables at work, not the least of which is product availability, which is affecting everybody.

Some more than others. As 22 News (is that caliber?) reports, plenty o’ dealers are pissed off at Uncle Sam for C.A.R.S. payment delays. And plenty of consumer orgs are pissed off at the car dealers for transferring the “risk” onto their customers, as the LA Times reports.

In some cases, the groups said, dealers are requiring buyers to sign contracts obligating them to repay the program’s $3,500 or $4,500 rebate if the government denies the claim — despite a federal advisory stating that customers are not required to sign such agreements. Dealer associations in some states, although not in California, are providing the agreements on their websites for their members to use in clunker transactions.

Meanwhile, manufacturers are ramping up production, Big Style. Which could backfire, Bigger Style. If demand drops off just as fresh inventory reaches the front lines . . . Haig Stoddard, manager, North American light-vehicle production, for the Global Automotive Group of IHS Global Insight, told BNET that the risk is out there.

The automakers will be strongly tempted to cram as many sales as possible into the 2009 calendar year, to improve their financial results, Stoddard said in an Aug. 13 conference call. He warned the automakers against “giddiness . . . well, giddiness probably isn’t the word.”

Agreed. Grease is the word. And when that runs out, bad things could happen. Not that TTAC is unduly pessimistic or anything.

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16 Comments on “Domestics’ Share of Cash for Clunkers Sales Shrinks; Toyota Tops the Table...”


  • avatar
    quasimondo

    So we’re not using the Edmunds’ list anymore?

  • avatar
    NulloModo

    The lack of inventory is the biggest problem right now. Customers are getting upset when they come in and find no selection of whatever model they are looking for, and don’t seem to understand how much business the program is actually driving. If we could get 30 more each of Fusions, Foci, and Escapes we could easily sell through them before the end of the month, but even buying up every car we can get our hands on, there just aren’t enough out there.

    The smaller dealers who can’t afford to float the hundreds of thousands of dollars tied up in CARS vouchers are also between a rock and a hard place. If they stop accepting C4C deals, they lose a good bit of business, but until the government starts paying on the vouchers, they are playing with razor thin levels of operating capital.

  • avatar
    Roundel

    From what I have heard via other sources is now dealers can take these vouchers and apply them to factory order cars. Which would mean of course a little more oppertunity for a sale. Sure manufactuers incentives would not apply, but that would only be a bad thing for the customers.
    Now if only the dealers can actually get their money.
    Their is plenty of news about ramping up production and it seems everyone has caught the overtime fever, but these companies need to tread lightly, or they could end up back exactly where they started.
    As for that little comment about a Chrysler dealer running out of vehicles, they are kinda late to that news party. Chrysler was effectivly cleaned out in the first week with their double cash offers.

  • avatar
    CarPerson

    Correct me if I a wrong but didn’t Edmonds put out a table or two that shows the CARS program is involved in about 3% of car sales? I’m not sure I’d call that driving new cars sales.

  • avatar
    John Horner

    “Correct me if I a wrong but didn’t Edmonds put out a table or two that shows the CARS program is involved in about 3% of car sales?”

    As I have been saying for weeks now, one of the stimulative benefits of the program has been that people who had been putting off buying a new vehicle decided to find out if they could get in on the program, and even though they didn’t qualify they still went ahead and got a new vehicle. How big this effect is will take some time to learn, but it is clear that up until July, new vehicle sales were running a quarter to a third lower than they had for many years. Not all of the July uptick can be directly attributed to C4C deals.

    As far as Toyota taking the sales lead, no surprise there. Toyota has long sold more CARS than anyone else in the US. C4C deals are often trucks being scrapped in favor of cars and mini-CUVs. GM’s car and small CUV lineup is anemic and dealer inventories are next to nothing. Then there is the Prius effect. Prius inventories have dropped like a rock thanks to the sudden renewed buyer interest.

  • avatar

    There will be more money when the $3b run out. The German program had to be raised to $7b, about right for one year in a country with a quarter the population of the USA. Even with that, the program is justabout tapped out. Money for only 200K kars left, out of 2m possibles …

  • avatar
    mpresley

    In some cases, the groups said, dealers are requiring buyers to sign contracts obligating them to repay the program’s $3,500 or $4,500 rebate if the government denies the claim — despite a federal advisory stating that customers are not required to sign such agreements.

    This is the mortgage meltdown on wheels. Our government is distorting the marketplace by 1) subsidizing those who are bad risks and should, therefore, be driving paid for clunkers but instead are now becoming debtors; 2) subsidizing those who do not need a subsidy. It is the worst of both worlds. To make matters worse, anyone interested in a new car but who does not have a clunker is foolish to buy as long as this program is in effect. This is economic insanity.

  • avatar
    dwford

    In some cases, the groups said, dealers are requiring buyers to sign contracts obligating them to repay the program’s $3,500 or $4,500 rebate if the government denies the claim — despite a federal advisory stating that customers are not required to sign such agreements.

    Yes, and I don’t blame them. We double and triple check the documents we collect for the C4C program, but it is easy to miss something as small as a middle initial being wrong on one of the documents – which will cause the government to reject it. Or to misread the insurance cards an not realize that the dates don’t quite add up to one year. Shockingly, many drivers don’t have up to date paperwork for their insurance and registration. Shocking! So I don’t blame the dealers for a little CYA.

  • avatar
    dwford

    To make matters worse, anyone interested in a new car but who does not have a clunker is foolish to buy as long as this program is in effect.

    True. With supplies this tight, dealer discounts are gone. A regular customer coming in is going to pay much more than if they had bought 2 months ago. The rebates are still around, though.

  • avatar
    CyCarConsulting

    Really, is anyone surprised that Toyota would get the lions share of this program?

  • avatar
    findude

    Fuel sippers are moving like crazy. A couple of months ago I test drove a Honda Fit (nice car). Autotrader showed there were over 500 available within 25 miles of my ZIP Code. I just checked again, and there are only 157 now. It’s possible this is partly due to model-year-changes affecting production somewhat, but I understand the 2010 Fit to be a continuation of the 2009 so I doubt the effect is large.

  • avatar
    lw

    Spring time will be interesting. By then the unintended consequences will be understood.

    Retails sales (even at Wal Mart) are heading down… Maybe all those new car payments and higher insurance payments actually need to be made with real money?

    What we need new a plan that allows people to buy stuff, but doesn’t impact their savings, cash flow or create new debt. I haven’t worked out the details, but we’ve got lots of smart people in this country so I’m not worried.

  • avatar
    YotaCarFan

    “What we need new a plan that allows people to buy stuff, but doesn’t impact their savings, cash flow or create new debt. I haven’t worked out the details, but we’ve got lots of smart people in this country so I’m not worried.”

    There is a very simple way to do just this: An across the board tax cut, either on individuals’ tax or on corporations’ tax. This will release more money into the economy immediately. However, this will not happen under Obama’s watch — his goal is to expand government control, which requires tax increases. Think about it: If he’d reduced federal income tax this year by the amount he just spent on the $1T “stimulus” bill, $100B GM+Chrysler bailout, $275B bank & foreclosure bailouts (WSJ), the proposed ObamaCare bill, etc, there would be plenty of extra cash in people’s pockets for buying stuff, not just cars. Ex: 300M USA population, 72% are over 20yo (Wikipedia) and are adults/taxpayers = 216M people; Reducing taxes by $1.375T for 216M people gives $6400 per person in CASH. That’s more than enough for a car downpayment, a couple of mortgage payments, a year of HMO healthcare, plus a few bags of groceries. If I can figure this out, it should be obvious to the economists in Obama’s cabinet and to Congress. They do *not* want to stimulate the economy; they want to make people dependent on the govt so people will vote for them (politicians on which people feel dependent) in the future. True socialism.

  • avatar
    lw

    YotaCarFan:

    Obama has been checkmated… I don’t envy him.

    He ran on an agenda to do everything for everyone… Now he get’s in office and he is literally out of money…

    Tax revenues are way down..
    Entitlement spending is way up…
    EVERYONE needs money.. GM, Chrysler, the FDIC, AIG, Citi, USPS.. the list is very very long…

    and

    He needs to provide healthcare for everyone, fix the environment and do 20 other very expensive things that he promised.

    The USA’s average standard of living will fix everything. Government has grown via foreign investors. As the dollar is weakened, they will find other things to invest in (or need the cash to live off of) and then the US citizen will actually have to pay for larger government at the expense of maintaining/improving their personal standard of living (remember that paying taxes is patriotic)

    We won’t agree to that and then the government’s entitlement programs will be dismantled one at a time.

  • avatar
    panzerfaust

    The only thing worse than having to pay for GM and Chrysler’s bailout (Ford has dipped its snout in the government trough too) is to use taxpayer supplied cash incentives to buy Toyotas. Talk about hitting yourself in the head with a hammer.

  • avatar
    fincar1

    I was looking around at Mustangs before the c4c program went into effect. Now I’ve seen the lines of vehicles turned in for engine grenading; most of them seem to be perfectly decent-looking cars and pickups. (remember this is the largely salt-free Pacific northwest.) Given my general feelings about this program, I think the best thing for me to do is to refuse to set foot or wheel on any new car dealer’s lot until after the end of the C4C program.

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