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Posts Tagged ‘cash for clunkers’

November Car Sales Could Be Best Since Mid-’09

Market keeps gaining momentum.

by on Nov.29, 2011

Increased availability of Japanese products, like this 2012 Toyota Camry, appear to have helped build November sales momentum.

The U.S. economy looks like it got a lift in November from new vehicle sales – which continue gaining momentum despite earlier concerns that the automotive market would cool down after a hot October.

Sales of new cars in November have climbed to a level last seen more than two years ago when the government’s “Cash for Clunkers” was in full swing, according to analysts who follow sales trends. Full results for the month are due December 1.

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“We’ve seen six straight months of year-over-year gains for new vehicle sales, which shows positive momentum for the auto industry,” said Jesse Toprak, vice president of Industry Trends and Insights for the automotive website


Prisoners, Children and Dead People Collected Tax Breaks Under Clunkers Program

New report finds extensive fraud responsible over $1 mil in claims.

by on Jun.10, 2011

A new report by a government watchdog agency found children, dead people and prisoners collected checks illegally under the Cash for Clunkers program.

In some parts of the country, it’s been claimed, the dead still vote.  True or not, it appears at least some folks who were clearly not around to buy a car nonetheless had claims filed on their behalf for tax credits on the oft-maligned Cash for Clunkers program used to spur U.S. car sales in 2009.

The government-run watchdog, the Treasury Inspector General for Tax Administration, also found 439 prisoners put in claims, “even though they were in prison for a full year in 2009 when the vehicle was purportedly purchased,” the agency reported.  And it found that a number of children under driving age also submitted claims for tax credits that ranged as high as $4,500 a vehicle.

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The report found that the Internal Revenue Service failed to flag 4,257 questionable claims, in all, which generated $151.1 million in tax refunds.  That was a relatively small figure when compared with the overall size of the so-called Cash for Clunkers campaign, which Congress approved as a way to pull the U.S. auto industry out of its worst downturn since the Great Depression.

“While no amount of fraud is acceptable, more than 4.3 million taxpayers claimed more than $7.2 billion in qualified motor vehicle deductions and only a small percentage involved questionable claims,” the tax agency said.


Car Sales Unexpectedly Sliding, China Opts for U.S.-Style Cash-for-Clunkers Program

Incentive program includes buses and trucks.

by on Jun.08, 2011

China has become the world's largest automotive market, cities like Shanghai choked with traffic.

With the nation’s automotive market showing some unexpected signs of weakness, nervous bureaucrats have rolled out an incentive effort loosely modeled upon America’s controversial Cash-for-Clunkers program.

After years of double-digit sales gains, what is now the world’s largest automotive market posted 14% decline in sales last month compared to April.  But whether that was a temporary aberration or signs of a longer-term slowdown remains to be seen.

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Either way, it is creating deep worries in a country where automotive demand has helped fuel a booming economy.  And industry leaders are fretting about the billions they are spending to expand capacity to match earlier sales expectations.


August Car Sales Slipping Slightly From July

Numbers look especially bad compared with Clunker-boosted ’09.

by on Aug.19, 2010

The metal is moving more slowly this month, says J.D. Power.

U.S. car sales appear to be slipping a bit this month, according to preliminary dealer data, though the industry trend line is up from the first half of 2010.

But anticipate some dire reporting when the full month’s numbers hit the headlines, industry analyst caution, because makers will be making year-over-year comparison to August 2009, when the federally-funded Cash for Clunkers program fueled an otherwise dismal U.S. auto market.

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Based on figures for the first half of the month, retail car sales are off “slightly” from July’s strong pace, reports J.D. Power and Associates.  Excluding the fleet market – which has been propping up a number of makers, including some of the domestics – the Seasonally Adjusted Annual sales Rate, or SAAR, will slip to 8.9 million, compared with a retail SAAR of 9.2 million in July 2010, noted the California-based research firm.


July Car Sales Bounce Back

Some brands soar, but Toyota, Honda post declines.

by on Aug.04, 2010

Honda is hoping new 2011 models like the CR-Z will help push sales back into the plus category.

Car sales bounced back in July after sputtering a bit in June  as Auto Data estimated the annual sales rate in July hit 12.1 million units.

But the comeback in sales wasn’t uniform as some brands posted double digit increases while major brands such as Toyota and Honda actually reported declines in overall sales.

American Honda Motor reported sales dropped 5.6% for the combined Honda and Acura brands, to 112,437 vehicles.  Honda was one marque to score significant gains from the Clunkers program, which generated significant traffic in July 2009 and made it more difficult to score gains for July 2010.

Overall Toyota sales dropped 6.8% to 169,224 units, despite the hefty incentives it has been offering in recent months. Toyota Motor Sales vice president Bob Carter insisted the Japanese giant was pleased with its sales performance, blaming the drop in  July volume on last year’s “Cash For Clunkers” program.


While the two leading Japanese automakers found it difficult to pull year-over-year gains when comparing their latest numbers with Clunker-driven July 2009 volumes, Hyundai was able to pull off another strong showing.  Though it was also one of the biggest beneficiaries of the incentive program, Hyundai said its sales increased by 19% compared with the same period a year ago – in fact, it set an all-time sales record for the month of July.


China Extends Old-for-New Incentives

Effort to maintain momentum as economy shows signs of trouble.

by on Jun.21, 2010

Chinese makers could benefit big from an extended cash-for-clunkers program.

China’s Ministry of Commerce, hoping to forestall a potential slump in the country’s automotive market, have decided to extend their own version of the cash-for-clunkers program.

The “old car for new” subsidy, which expired on May 31, will now run until at least the end of the year, and provides cash incentives of up to $700, or 6,000 yuan, for those who trade in an outdated vehicle for a new model.

While the program is designed to maintain momentum in the car market it has a secondary purpose, much like America’s clunkers program, which was intended to help rid the roads of old, fuel-guzzling, smoke-spewing vehicles.

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That’s even more important in China, which is only now ramping up its vehicle emissions standards to world-class levels.  Most older models don’t come close to meeting today’s smog rules, a particular problem in pollution-choked cities like Shanghai and Beijing.


Did “Cash for Clunkers” Program Help the Economy, Environment?

Actually economic and environmental effects are debatable.

by on Apr.30, 2010

Does this look like a healthy economy to you? (Click on the chart to enlarge.)

The House Committee on Energy and Commerce is interpreting a new General Accounting Office study of the “Cash for Clunkers” program as saying it met key goals of stimulating the economy and improving vehicle fuel economy.

If only it were that simple.

The press release from the Committee selectively quotes the GAO in what appears to be an attempt to justify the Administration’s economic policies in an election year.

The new GAO report, Lessons Learned from Cash for Clunkers Program, “confirms the beneficial impacts of the CARS program,” according to the Committee headed by Henry A. Waxman, a Democrat from California.

“The CARS program is a classic example of how good environmental policy can also be good economic policy,” said Chairman Waxman. “And it shows how Congress and President Obama have worked to get the American economy moving.”

GAO reviewed two key program goals: stimulating the economy and putting more fuel-efficient cars on the road, and concluded, “The program achieved these broad objectives.”

However, the report also says, “the extent to which it did so is uncertain. For example, nearly 680,000 consumers purchased or leased vehicles using the program’s credit, yet some of these sales would have happened anyway.”    (more…)

Rubles for Clunkers

Russia struggles to revive its own auto market.

by on Mar.10, 2010

Sales have been slow at showrooms, like Moscow's Major mega-dealer, with a quick turnaround considered unlikely.

What was once among the world’s fastest-growing car markets has struggled to avert disaster in recent months.  Now, Russian authorities hope to turn things around by borrowing an idea that’s worked in a number of other markets, including the U.S., throwing money at it.

The Russian version dwarfs America’s Cash for Clunkers program, however, and could eventually involve the investment of $20 billion over a 10-year period, with an initial $6 billion meant to yank the market out of its deep recession.

As in the U.S., that money will be used to stilulate demand for new vehicles – which plunged 49% last year – and to get off the road as many of Russia’s smoke-belching Ladas and Vazs as possible.  But some of the money will also be used to train workers and to prop up the struggling home automaker, AvtoVaz, which still holds a 30% share of the market.

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“Our end goal is to build a modern auto industry in Russia, including the entire production chain — from the steel sheet to the end product,” Prime Minister Vladimir Putin said, in a statement quoted by the Detroit Free Press.


Cash for Clunkers Did Better Than Expected

Should program be repeated, authors ask.

by on Mar.09, 2010

Despite some problems, the Cash for Clunkers program was a big success, contends a new study.

Despite some well-publicized problems with the administration of last year’s so-called Cash for Clunkers program, the venture performed even better than anticipated, according to a new study that shows it brought significant incremental sales to a struggling U.S. automotive market.

In all, the Cash Allowance Rebate System, or CARS, directly generated 542,000 sales that would not have been made without the program, which offered qualifying buyers incentives of up to $4,500, reveals a new study by Maritz Automotive Research Group.  In addition, about 250,000 “halo sales” were created, according to Maritz Vice President Dave Fish.  Those were sales made to buyers who either didn’t qualify for the tax credits or who decided to purchase a vehicle that wan’t covered by CARS.

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“As far as taxpayers are concerned,” said Fish, “from a return-on-investment standpoint, (the program) certainly met its goals” of both stimulating the automotive market and removing inefficient, polluting cars from the road.”


Japan Opens its Clunkers Program to U.S. Autos

A largely symbolic move reverses ban of offshore makers.

by on Jan.19, 2010

The Cadillac CTS is one of a few Detroit cars likely to gain sales under a new Japanese Clunkers program.

Bowing to heavy pressure, Japanese government regulators have lifted rules that would have barred American automakers from participating in that country’s own version of the Cash for Clunkers program.

The rules were seen as adding insult to injury considering that Japan has largely been closed to foreign makers, who have never been able to capture more than a tiny sliver of the Japanese market.

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Asian importers reacted angrily, a year ago, when the U.S. Congress first considered adding rules to the American clunkers program that might have restricted sales of imports.  Ultimately, Japanese brands accounted for 319,000 of the 677,000 vehicles sold through the program, formally known as the Cash Allowance Rebate System, or CARS.