Big Three take 47 percent of 'Cash for Clunkers' sales

[Z-06]

[source: Detroit News]

Big Three take 47 percent of 'Cash for Clunkers' sales; Ford Focus top-seller

David Shepardson / Detroit News Washington Bureau

Washington -- Detroit's automakers accounted for 47 percent of the first 80,000 "Cash for Clunkers" sales, the Obama administration said today, and the Ford Focus is the top-selling vehicle in the program.

Through Saturday afternoon, the National Highway Traffic Safety Administration has processed 80,500 transactions, the White House said.

White House spokesman Robert Gibbs said buyers should be able to take advantage of the program until Friday, but he warned it would likely have to shut down before next weekend if the Senate doesn't agree to add $2 billion to the original $1 billion pot.

On Friday, the House approved the $2 billion increase. The Senate is expected to vote Wednesday or Thursday; the White House is pressing it to act.

Transportation Secretary Ray LaHood told MSNBC that the program has been a "lifeline to the economy."

NHTSA said about 250,000 vehicles will be able to take part in the $1 billion program.

General Motors Co., Ford Motor Co. and Chrysler Group LLC sales account for 47 percent in the program, which is above their overall share in the auto market of about 45 percent of the three Detroit companies.

The Ford Focus is the top-selling vehicle in the program. Four of the top 10-selling vehicles are manufactured by Detroit's Big Three. Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States.

Gibbs said the program has been a "big benefit to domestic automakers."

The transactions are generating a 61 percent increase in vehicle fuel economy, Gibbs said. The average fuel economy of new vehicles purchased under the CARS program is 25.4 miles per gallon, and the average fuel economy of trade-ins is 15.8 mpg, for an average increase in fuel economy of 9.6 mpg.

This is well above the law's minimum requirements of a 2 mpg improvement for trucks and a 4 mpg improvement for cars. Gibbs said it will save an average consumer $700 to $1,000 in gas.

Gibbs said the $2 billion should allow the program to continue through September.

Supporters and the White House will use the numbers and the job-creating impact of the "Cash for Clunkers" program to ease environmental concerns of many Senate Democrats who thought the program's efficiency requirements should be tightened.

The improvement in fuel efficiency will save a typical consumer between $700 and $1,000 per year in reduced gas costs, Gibbs said. In addition to the money saved from fewer gas purchases, consumers participating in the program will have safer cars, fewer repair costs and dramatic reductions in air pollution, officials said.

Thus far, 83 percent of trade-ins under the program are trucks, and 60 percent of new vehicle purchases are cars.

[PurdueGuy]

You know, as much as I HATE seeing some of the perfectly good cars being destroyed, and I am really not a fan of some of the particulars of the deal overall, this is a lifeline to the auto industry when it desperately needs it. It's awfully nice of China to loan us money for some new cars when we're already bankrupt...

[Brougham-Holiday]

You know, as much as I HATE seeing some of the perfectly good cars being destroyed, and I am really not a fan of some of the particulars of the deal overall, this is a lifeline to the auto industry when it desperately needs it. It's awfully nice of China to loan us money for some new cars when we're already bankrupt...

We need a "like" option like on Facebook so I can like this response, because it hits the nail right smack in the middle of the head.

[Oracle of Delphi]

Who got the other 53%?

[Justin Bimmer]

PCS - More than 3 companies.

[Oracle of Delphi]

PCS - More than 3 companies.

My point was they were not American companies ...

[siegen]

Even though half of the new car purchases were domestic, the vast majority of the trade-ins were domestic. What does this mean? While we tend to look at the market share of new car sales, consider buyer loyalty (buyers tend to purchase the same make as their used car). This program takes a lot of domestic used car drivers and puts them in imported brands, meaning in 3-5-10 years or so when these new cars are being traded in, the buyers will likely stick with their brand. The net result is lost market share for domestic brands, even though the current figure seems to suggest an even division between domestic and import sales.

On the flip side, you could figure that these domestic used-car driving people would have eventually traded into imports anyway, this program just expedited the process.

Either way, who's fault is it? Well the domestic brands for building considerably fuel-inefficient vehicles over the last 25 years. Who can blame them? Gas used to be cheap. They've wised up over the last 10 years or so, but the effects will continue to be felt for many years.

My point was they were not American companies ...

Should they all have been American companies? Buyers can purchase what they want, and it's the automakers job to attract buyers.

[A Horse With No Name]

True to a point, Sigen. But most of the cars that qualified as trade ins were domestic.

One would see plenty of old Camcords and Civics traded in the government wanted everyone to drive a body on frame car for safety or something.

That being said, the domestics have a LONG way to go in terms of small cars.

It's just too bad the crop of current small Japanese cars (Civic, Corolla, the ungodly ugly new 3, the amazingly ugly Mitsu products, the trash from Suziki) is so progoundly unattractive.

To think that one could trade a rusted F150 in on a new car and actually get somehing that looked worse...

Chris

[PurdueGuy]

Should they all have been American companies? Buyers can purchase what they want, and it's the automakers job to attract buyers.

I think the issue some have (and I wrestle with) is that the bill possibly should have leaned a bit more toward protecting american interests, seeing as how it uses american taxpayer money.

A bill that said "it has to come from a domestic brand" wouldn't have passed, as we know, since import brands have US factories, which provide political leverage on those states where the factories reside. Perhaps what could have been done is a credit that acknowledged US (or NA) assembly and gave increased credit toward purchase of those US (or NA) assembled vehicles. This may have been able to garner enough political popularity to actually happen.