Cash-for-Clunkers Marketing Heats Up

Hyundai Motor America launched the first marketing salvo in early July trying to get an early jump on other auto makers with the cash-for-clunkers incentive.

While the National Automobiles Assn. and National Highway Traffic Traffic Safety Admin. both cautioned dealers not to sell vehicles under the program until the final rules were published on July 24, Hyundai began fronting the $3,500 and $4,500 incentives to its dealers if they sold a vehicle using cash-for-clunkers.

Hyundai says the program generated 10% of its overall sales through the first half of July. The first week of the program, the Korean auto maker reports Ford vehicles accounted for 32% of the trade ins to be scrapped with Dodge making up 23%. Various luxury brands accounted for the rest.

Hyundai's Elantra was proving to be most popular vehicle for cash-for-clunker buyers which customers could purchase for about $8,600 with government and company incentives.

Chrysler Group LLC then pounced on the cash-for-clunkers program on July 23 offering to double the government incentive on select vehicles. Chrysler's plan, which runs through Aug. 31, provides $3,500 or $4,500 rebates (depending on the government incentive), or zero-percent, 72-month financing, on most 2009 models.

Ford Motor Co. was making early noise about being the de facto source of information for the “cash-for-clunkers” program.

“We're setting out to be go-to experts on the program itself,” John Felice, Ford Div. marketing manager, tells Ward's. “We're communicating with our dealers and making sure they're equipped on details.”

The auto maker was going to hold training sessions for its dealers while launching an aggressive marketing plan.

But Ford appears to have been trumped by Hyundai and Chrysler's programs. And Ford executive Mark Fields tempered expectations telling reporters the initiative likely will not lead to a dramatic spike in sales.

In addition, Ford Credit tells Ward's it will not change its lending practices to accommodate potential non- and subprime consumers for cash-for-clunkers. Ford dealers report being told the same thing by Ford Credit executives.