From the The Washington Times
By, William Ehart
“Cash for clunkers” was a party for U.S. auto sales in August, but the hangover began before the month had ended, analysts said.
The federal program offering rebates of up to $4,500 for those trading in older cars for more fuel-efficient models made August the best month of the year so far for auto sales.
The combination economic stimulus and environmental initiative boosted sales particularly for Ford, Toyota, Honda, Hyundai and Subaru, but sales tailed off in the final week of the month after the program ended Aug. 24.
“I’m disappointed,” said analyst George Magliano of IHS Global Insight. “We thought there would be a little more of a push at the end of the month, but it started to run out of steam.”
Some were encouraged, however, by a 13 percent increase in sales of Ford’s F-series pickup trucks, often used by contractors.
“It may be a glimmer of hope” for the economy, Ford Vice President Ken Czubay said.
Mr. Magliano increased his forecast for this year’s sales by about 500,000 vehicles to 10.3 million as a result of better-than-expected “cash-for-clunkers” sales.
But he lowered his prediction for next year’s sales by about 250,000 to 11.1 million vehicles.
About 700,000 cars were purchased through the clunkers program, at a cost to taxpayers of $2.88 billion.
“Anecdotal reports detailed a significant decrease in the selling pace during the last week of August,” Robert W. Baird analysts David Leiker and Keith Schicker wrote Tuesday in a research note. “This does not bode well for September.”
While sales at most automakers rose in August, particularly among Asian manufacturers, Chrysler sales fell 15 percent and General Motors sales fell 20 percent, suffering from a comparison to strong sales in August 2008.
“Chrysler along with GM is another one of those manufacturers where you don’t think of them when you think of fuel-efficient vehicles,” said Jessica Caldwell, an analyst with auto information site Edmunds.com.
“From an inventory standpoint, they definitely suffered as they shut production pretty much for a long time,” she said.
GM, hurt by its own bankruptcy-related shutdown, said inventory levels sank to 379,000 in August — the lowest since GM began keeping track.
Toyota’s August sales rose 6.4 percent as it dominated the clunkers program. Honda’s sales rose 10 percent, its biggest increase since May 2008. Sales at Subaru, the only automaker with a year-to-date sales increase, jumped 52 percent. Hyundai sales surged 47 percent to a record.
Foreign automakers fared best in the clunkers program. Detroit automakers, which have captured 45 percent of U.S. sales year to date, got 39 percent of cash for clunkers sales.
Ford sales rose 17 percent on the popularity of fuel-efficient vehicles such as the Focus and the Escape, among the top sellers in the clunkers program.