Well, it now appears that GM may have been a little hasty when they decided to add jobs and ramp up production August. In a recent report, it would appear that GM and Chrysler sales have plummeted since the Cash for Clunkers program ended, with Chrysler’s new car sales dropping by almost 50%.
Of course, almost all car companies are reporting some drop in sales in September, which is the first full month with out the government run incentive program Cash for Clunkers.
Saturn, who is in the process of being phased out of production, saw the most significant drop of near 90%.
Boosted by fleet sales, Ford actually weathered the storm fairly well, seeing about a 15% drop in consumer sales, but a 23% increase in fleet sales. In the end, Ford was about 5% below where they were last year in sales. Ford’s Volvo Division, also did quite well, seeing sales increase.
Ford, who was the only company who did not accept bail out money, has been aggressively marketing their cars over seas and overall trouncing other American automakers on most fronts.
Cadillac, which is GM’s luxury brand saw sales increase as well, although this was not enough to bring GM out of the gutter.
It now is clear that Cash for Clunkers was a very effective means of getting the public to purchase a new car, with it going a long way to stimulating the auto industry.
One of the biggest criticisms of the incentive program was that it might be just getting people to push up their car purchases, but not really stimulating that many new sales. The argument being that perhaps most of those who used the Cash for Clunkers program were planning on buying a new car anyway, but pushed up their time table to take advantage of the program.
While it is still too early to say, it is safe to assume that the record sales of August, when Cash for Clunkers was winding down, will probably not be seen again for some time.
With this September Slump in sales, it begs the question whether the boost provided by Cash for Clunkers will be enough to helps the like of Chrysler and GM, who are already fairly close to being unsustainable.
Perhaps the government will have better luck running them than the previous executives though, who seemed to be more concerned with their lifestyle than the direction they had let their companies go.
However, with such a sharp decline, it is hard to think that these companies would be salvageable, well at least not on their own. Fortunately, the tax payers are there, so these companies do not have to worry about making a better product.
According to Government Officials, the Cash for Clunkers program is set to end on Monday August 24th.
All pending Cash for Clunkers Applications must be submitted by dealers no later than 8 PM EST on Monday.
Congress and the Department of Transportation decided on the premature end date after analysis showed that the program was quickly approaching its budget. They project, however, that there should be enough money to process all transactions up until Monday.
With the announcement of the deadline to submit applications for the Cash for Clunkers Program, new car dealers are expected to aggressively push the program this weekend.
Thus far, over 450,000 new cars have been purchased as part of the program with almost $2 Billion in rebates paid by the government. The next three days is expected to allow the car dealers to finalize any pending sales and give consumers a chance to take part in the program.
The Cash for Clunkers Program, which provides rebates of up to $4,500 for trade-ins, gained a great deal of attention over the last few weeks, when it quickly expended its $1 Billion budget. The program is intended to offer an incentive for Americans to purchase a new more fuel efficient vehicle, with the engine of their older model being destroyed. This is intended to not only stimulate new car sales at a time when many auto manufactures are struggling, but also help create a more fuel efficient fleet of vehicles.
Congress and President Obama apparently did not expect the program to be so popular, nor to generate as many sales as it did, as the original budget was depleted within a month of the programs start. The program had originally been slated to run until November.
To help revive the program congress agreed to give the program an additional $2 Billion last week, but this was obviously not enough to curb the popularity of the Cash for Clunkers Program.
With many car manufactures reporting record sales, including GM who announced they would reinstate a number of union jobs, it remains to be seen whether these sales figures will remain steady after the Cash for Clunkers Program is over, or if sales will rapidly decline as the program ends.