'Clunkers' helped economy, environment, auto execs say


After missing Monday's trade-in deadline, Las Vegas hotel worker Stuart Michaels is wondering if the government might reinstate the "Cash for Clunkers" incentive package that stimulated nearly 700,000 new-car sales in the last five weeks.

He figures the $3 billion program is a drop in the bucket compared with the $750 billion allocated for the bailout of the banking industry.

Is there a possibility of bringing it back?

It's doubtful, said Justin Findlay, general manager of Findlay Chevrolet in Henderson. Even though the program worked on several levels, he hasn't heard any talk among dealers that the government would extend the program.

"Obviously, it put people back to work and stimulated the economy," Findlay said. "Right now, our inventories are very depleted, so we're ordering more cars and that puts more people to work. I would have to think it was so successful, there's got to be people somewhere thinking about a similar program."

"Cash for Clunkers" boosted both the economy and the environment, an executive for Ford Motor Co. said during a business trip to Las Vegas.

"It delivered on its promise to help consumers, stimulate the economy and enhance energy security," Scott Tobin, a vehicle line director from Dearborn, Mich., said Wednesday at Ford Country in Henderson, where he was showing the 2010 Taurus to local dealers and sales staff.

In addition to stimulating sales, the program increased average U.S. fleet fuel mileage by 9 miles a gallon, Tobin said. Its primary purpose was to take high-polluting cars off the road and replace them with more fuel-efficient vehicles.

Ford had 20 vehicle models that qualified for purchase, led by the Focus, Fusion and Escape. The automaker captured 14.4 percent of total sales, behind Toyota's 19.4 percent and General Motors' 17.6 percent.

Most analysts expect new-car sales to slump following the summertime buying frenzy. Sales rose to 11.2 million in July, the first month this year above 10 million. Last year, sales plunged to the lowest levels since the early 1980s.

Car dealers are a resilient group, said Wayne Frediani, executive director of Nevada Franchised Auto Dealers in Sparks. They'll climb out of a hole and get back up after they're down, he said.

"I don't have a crystal ball. I don't know what's going to happen," Frediani said. "I am encouraged that we see a little uptick in consumer confidence and consumer spending. I talked to a dealer in Elko last week who said things picked up because mining is doing good up there."

Findlay said "Cash for Clunkers" accounted for a large chunk of sales in the last few weeks, but those buyers are still a small percentage of the overall consumer population.

"I feel like there were probably a lot of people who stayed on the sidelines because they didn't have a car that qualified," he said.

Tobin said Ford would continue to build on the momentum from the incentive package.

"We're going to stick to our plan," he said. "We've got a self-reliant business plan and a key part of that is a very aggressive product plan. Our products are recognized for quality leadership, our designs and great driving dynamics."

Tobin expects the 2010 Taurus, starting at $26,000 for the base model, to be a high-volume seller for Ford. It's the "smartest" full-size sedan in America with 10 class-exclusive features, or technology that would cost $15,000 to $20,000 more in a higher class, he said. Those features include a cross-traffic alert system that helps detect traffic approaching from the sides when backing out of a parking space; a voice-activated navigation system with Sirius travel link; keyless entry keypad for unlocking the driver's door; and collision warning and brake support that uses radar to detect moving vehicles ahead.

Findlay said his dealership has been paid on about 10 percent of clunker trade-ins, which is better than most dealers. It's been an "absolute nightmare" with the vouchers, even those that were submitted at the beginning of the program, he said.

 

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