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By William Maley
The COVID-19 pandemic has basically brought most of the world to halt. Orders to stay at home, businesses either having workers to their work from home or closing down, and unemployment skyrocketing is causing the economy to crater. There are efforts to try and jump-start the economy such as $1,200 stimulus checks. But an executive at Ford wants to see a return of a "cash for clunkers" like program.
“We think some level of stimulus somewhere on the other side of this would help not only the auto industry and our dealers, which are a huge part of our overall economy, but will help the customers as well,” said Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service to Bloomberg.
“Cash for clunkers was very effective at that time. It would be nice to think we could have something equally as effective for 2020 when we get out of this because it was a great program.”
According to LaNeve, internal discussions are taking place at Ford about doing a similar program and there are plans to bring the Government in to these talks.
When asked by Automotive News about this, Ford spokeswoman Rachel McCleery said, "The auto industry is America’s economic engine.We are encouraging Congress to look at a variety of ways to drive job creation, increase demand, support customers and provide long-term stability for the entire auto ecosystem."
A brief refresher on the Cash for Clunkers program. In 2009, the U.S. Government introduced a billion initiative called the Car Allowance Rebate System, which gave a voucher worth between $2,900 and $4,500 to anyone replacing a vehicle newer than 1984. Their old vehicle would be taken away and disposed of. The program was nicknamed Cash for Clunkers.
On the surface, the program was a success. Within first month, all of the funds were exhausted. This prompted the U.S. congress infuse an addition two billion into the program, which would be all gone within 17 days. But begin to look deeper and the results are mixed. In 2012, a study published in the Quarterly Journal of Economics described the program as being a bit of a wash,
"...the effect of the program on auto purchases is almost completely reversed by as early as March 2010 — only seven months after the program ended.”
Other studies have come to the same conclusion.
There's also the question of how many perfectly good used cars were taken off the road due to the program.
Source: Bloomberg via Automotive News (Subscription Required), The Drive, The Truth About Cars
View full article
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By William Maley
The COVID-19 pandemic has basically brought most of the world to halt. Orders to stay at home, businesses either having workers to their work from home or closing down, and unemployment skyrocketing is causing the economy to crater. There are efforts to try and jump-start the economy such as $1,200 stimulus checks. But an executive at Ford wants to see a return of a "cash for clunkers" like program.
“We think some level of stimulus somewhere on the other side of this would help not only the auto industry and our dealers, which are a huge part of our overall economy, but will help the customers as well,” said Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service to Bloomberg.
“Cash for clunkers was very effective at that time. It would be nice to think we could have something equally as effective for 2020 when we get out of this because it was a great program.”
According to LaNeve, internal discussions are taking place at Ford about doing a similar program and there are plans to bring the Government in to these talks.
When asked by Automotive News about this, Ford spokeswoman Rachel McCleery said, "The auto industry is America’s economic engine.We are encouraging Congress to look at a variety of ways to drive job creation, increase demand, support customers and provide long-term stability for the entire auto ecosystem."
A brief refresher on the Cash for Clunkers program. In 2009, the U.S. Government introduced a billion initiative called the Car Allowance Rebate System, which gave a voucher worth between $2,900 and $4,500 to anyone replacing a vehicle newer than 1984. Their old vehicle would be taken away and disposed of. The program was nicknamed Cash for Clunkers.
On the surface, the program was a success. Within first month, all of the funds were exhausted. This prompted the U.S. congress infuse an addition two billion into the program, which would be all gone within 17 days. But begin to look deeper and the results are mixed. In 2012, a study published in the Quarterly Journal of Economics described the program as being a bit of a wash,
"...the effect of the program on auto purchases is almost completely reversed by as early as March 2010 — only seven months after the program ended.”
Other studies have come to the same conclusion.
There's also the question of how many perfectly good used cars were taken off the road due to the program.
Source: Bloomberg via Automotive News (Subscription Required), The Drive, The Truth About Cars
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By William Maley
The coronavirus has caused a number of auto shows to either be pushed back (New York) or cancelled (Geneva). Add another show to the list as the Detroit Free Press is reporting tonight at the Detroit Auto Show has been cancelled.
In a memo that was sent to sponsors today, organizers of the show said that the TCF Center (formally known as Cobo Hall) has been designated as field hospital by Federal Emergency Management Administration [FEMA] for the next six months.
"The health and welfare of the citizens of Detroit and Michigan is paramount. TCF Center is the ideal location for this important function at this critical and unprecedented time,” NAIAS executive director Rod Albert wrote in the memo obtained by the Free Press.
The news was confirmed by ABC affiliate WXYZ after speaking with the chair of the 2020 show, Doug North.
"The North American International Auto Show is officially canceled. TCF is working with FEMA to use the center to deal with the COVID-19 outbreak," said North.
Ford and General Motors also confirmed the cancellation to The Detroit News.
Michigan is becoming one of the hardest hit states with COVID-19. State officials announced today that there are 4,650 confirmed cases and 111 deaths linked to COVID-19. Wayne County, where the show takes place has the highest numbers of the state - 2,316 confirmed cases and 46 deaths.
This was going to be a big year for the Detroit Auto Show with the move to the summer. Plans included rides and drives; an off-road course, and demonstration of autonomous vehicles.
Source: Detroit Free Press, The Detroit News, WXYZ
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