Dealers association revved up by CARS’ success.
Though most auto dealers in Westchester and the metropolitan area still had not been paid for their rebate sales when the government”™s “cash for clunkers” program ended last week, the $3 billion stimulus program for the auto industry should prove “very, very successful,” according to the president of the Greater New York Automobile Dealers Association.
Auto dealers, given a one-day extension to file for rebates when federal computers processing applications for the Car Allowance Rebate System (CARS) crashed last week, sold 690,114 cars and trucks on trade-ins for less fuel-efficient models. Dealers claimed payments from the government that totaled nearly $2.878 billion, according to the U.S. Department of Transportation. Buyers received rebates of $3,500 or $4,500 on their purchases.
U.S. Transportation Secretary Ray LaHood called the roughly four-week program “a win for the economy, a win for the environment and a win for American consumers.”
Following criticism and program defections by auto dealers in Westchester and nationwide over the program”™s computer glitches and unresponsive administration, LaHood in the closing days beefed up the “cash for clunkers” staff to more than 2,000 federal employees and outside contractors. With transactions ended, he said more staff will be added to process dealer applications. Dealers still can resubmit rejected applications.
Dealers in New York state claimed $156,292,000 in payments, trailing only California and Texas in program rebates.
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In the New York metropolitan area, dealers awaiting rebate payments from Washington, D.C., to cover their cash flow have received “not much yet,” Mark Schienberg, president of the 425-member Greater New York Auto Dealers Association (GNYADA), said last week. “A little trickling in, but we”™re not seeing the big payments coming in.”
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In the week before LaHood announced the close of the program, about half of GNYADA”™s member dealers said they were pulling back from the program, fed up at not being repaid by the government for vehicles they had already delivered to buyers. Schienberg said it was “a mixed bag” as to dealers carrying through on that threat. Some ended their clunker trade-in sales before the closing weekend, while others responded to a last-minute rush by consumers. “For some of them it was too good an opportunity to give up,” he said.
Transportation officials said cars made in America topped the most-purchased list, led by the Toyota Corolla. The Honda Civic was second most popular among ex-clunker owners, while the Ford Focus rated third.
The Ford Explorer four-wheel drive SUV led the list of trade-in vehicles, followed by the Ford F150 pickup and the Jeep Grand Cherokee.
Among manufacturers of new vehicles sold through the program, Toyota ranked first with 19.4 percent of sales, followed by General Motors with 17.6 percent and Ford with 14.4 percent of sales.
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As a result of the “cash for clunkers” program, “Manufacturing plants have added shifts and recalled workers,” LaHood said. “Moribund showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment.”
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Transportation officials pointed to a preliminary analysis by the White House Council of Economic Advisers that found the CARS program will boost economic growth in this third quarter by 0.3 to 0.4 percent at an annual rate due to increased auto sales in July and August.
White House economists said it will sustain the increase in gross domestic product in the fourth quarter because of increased auto production to replace depleted inventories and will create or save 42,000 jobs in the second half of 2009. Those jobs are expected to remain well after the program”™s close.
Ford and General Motors recently announced production increases for both the third and fourth quarters as a result of the demand generated by the program. Honda also said it will increase production at its three U.S. plants.
For auto dealers, the long-term impact of the “cash for clunkers” program might not be seen “for some weeks or months,” said Schienberg. “Did we pull people forward on their vehicle purchases or did this actually generate vehicle sales that would not have been there if the program had not been there?
“Whether they were pulled forward or not, I think what this did at a very, very important time was generate floor traffic and vehicle sales and that will help the parts departments and the service departments” down the road. “I think it will be something that will be looked at as very, very successful.”