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AutoBlog: REPORT: More automakers increase production to meet Cash for Clunkers demand

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Filed under: Car Buying


The Ford Focus isn't the only vehicle to have its production increased as a result of Cash for Clunkers. The government trade-in incentive program has resulted in a marked increase in demand for vehicles of all shapes and sizes, prompting many automakers to increase production in order to meet surging demand. But while the Obama Administration will be happy to see vehicles with particularly high MPG ratings on the list - American cars in particular - the top sellers are as diverse as the industry itself.

Ford's Escape and Edge crossovers will share increased production runs with the Focus, as will the Ranger pickup and Lincoln's MKX. Ford's Japanese subsidiary is diverting more new Mazda3s and Mazda5 minivans to the United States while increasing local production of the Mazda6. Toyota, whose Corolla is edging out the Focus as the top C4C seller, is increasing production on an unspecified number of vehicles, while extra shifts at Honda's American plants will boost production of the Odyssey, Pilot, Ridgeline, Accord V6, Element and CR-V. Meanwhile, Volkswagen reports increased demand under C4C for diesel Jettas especially, but says that supply is keeping up with demand, and General Motors has announced it is putting 1,350 back to work to keep up with demand for cars like the Chevrolet Cobalt.

[source: Automotive News - subs. req'd | Image: Scott Olson/Getty]

REPORT: More automakers increase production to meet Cash for Clunkers demand originally appeared on Autoblog on Wed, 19 Aug 2009 18:20:00 EST. Please see our terms for use of feeds.

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This is all great for business right now, but watch what happens when C4C is eventually shut down...

What will happen? Are you predicting a colossal meltdown of the automotive industry?

Jobs for people who are going to be recycling these vehicles will increase for a while, and there are other supporting jobs that will see a much longer-term benefit to this program than the automakers. And who knows, with an excess of scrap iron, raw material costs for the automakers may see a minor dip in the coming months.

Who knows, I certainly don't. All the negativity here seems to have stemmed from the initial scares that only imported brands would benefit from this program.

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I'm willing to bet that the month following the end of this program we're going to see a sharp decline in sales, just like how GM saw a sharp decline in sales after its first Employee Discount For Everyone.

Americans like cheap stuff. That's why they are buying now, whether they really should be or not. When prices jump back up to their normal levels, which is anywhere between $2k and 9k (there's apparently some dealers with incentives that double the C4C incentive), they're going to stop buying.

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The jobs provided by the C4C program is nice, but you have to admit that it's a bit of a sugar high for the industry, and there is likely to be a crash at some level when it's over. Hopefully it's not to the point that people called back to work get laid off again, but that the plants simply have to throttle back & find a "norm".

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