For a month, at least, things almost seemed to be back to normal around the auto industry, assembly lines humming and dealers racing to write up sales orders. But now that the Cash-for-Clunkers program has wrapped up, there’s mounting concern, across the auto industry, that August’s momentum could quickly be lost – or that the industry could be forced to launch a new round of costly rebates and other incentives.
“Cash for Clunkers proved Americans would buy a car if they got a good enough deal – and one available for a limited time,” says Stephanie Brinley, an automotive analyst with AutoPacific, Inc. “But the industry is going to have to come up with some pretty big and clever programs to keep from losing the momentum.”
Despite the big payout from the federal government, new research from Autodata Corp. shows the industry handed out an average $2,265 in rebates, subsidized loans and other incentives, last month, an increase of 31% from August 2008. And there are signs, already, that a big bump may be in the works – notably among Asian makers, like Toyota and Honda, that lag, rather than lead, the rebate wars.