Japanese Auto Makers Big Winners in Whirlwind Cash for Clunkers Program

NHTSA says passenger cars accounted for 404,046 of all purchases, or 59% of deliveries, while trucks accounted for 450,778 of the 700,000 clunkers taken off the road.

Ward's Staff

August 26, 2009

3 Min Read
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New cars from Japanese auto makers dominated the list of vehicles purchased on the newly concluded Cash for Clunkers program, while trucks from the Detroit Three topped the trade-in list.

According to the National Highway Traffic Safety Admin., which ran the program, the Toyota Corolla finished as the most popular new vehicle purchased, followed by the Honda Civic and Toyota Camry. The Ford Focus and Ford Escape were the only vehicles from the Detroit Three to make the top 10 list.

Pickups and SUVs from General Motors Co., Ford Motor Co. and Chrysler Group LLC dominated the trade-in list. Four-wheel-drive versions of the Ford Explorer ranked No.1, followed by the 2-wheel-drive Ford F-150 and 4WD Jeep Grand Cherokee.

NHTSA also says passenger cars accounted for 404,046 of all purchases, or 59% of deliveries, while trucks accounted for 450,778 of the 700,000 clunkers taken off the road. The top five manufacturers in the program included Toyota Motor Corp. with a market-leading 19.4% share, GM with 17.6%, Ford at 14.4%, Honda Motor Co. Ltd. with 13.0% and Nissan Motor Co. Ltd. at 8.7%.

The Cash for Clunkers program in the U.S. wound down yesterday evening, a wildly successful program but one haunted by computer glitches that frustrated many dealers.

According to the Dept. of Transportation, the 2-month-long Car Allowance and Rebate System incentive program resulted in 690,114 transactions valued at $2.88 billion.

Congress originally put $1 billion into the program with an expiration date of Nov. 1, but a mad dash by consumers to dealers compelled lawmakers to sink another $2 billion into it after the first few weeks.

The program awarded car buyers a voucher of up to a $4,500 toward the purchase or lease of new, more fuel-efficient model than the vehicle they traded.

Auto makers struggling through the worst sales downturn since the close of World War II embraced the program, as did their dealers. But dealers also complained of computer glitches that kept them from being reimbursed for the vouchers. Some regional groups even threatened to pull out of program, saying they were unsure if they would get back the millions of dollars they were owed.

Auto makers responded with cash advances to dealers. The government says today the program proved an unqualified success.

“Manufacturing plants have added shifts and recalled workers,” says DOT Secretary Ray LaHood. “Moribund showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment.

“This is one of the best economic news stories we’ve seen and I’m proud we were able to give consumers a helping hand,” LaHood says in a statement.

The average fuel economy of the new vehicles purchased under the program finished at 24.9 mpg (9.5 L/100 km), while the trade-ins averaged 15.8 mpg (14.9 L/100 km). The program spurred an increase in average fuel economy of 9.2 mpg (25.5 L/100 km), or 58%.

California, the nation’s largest new-vehicle market, was the biggest participant, accounting for $326.8 million in voucher requests. Texas, one of the nation’s largest truck markets, finished second with $183.8 million requested, followed by New York at $156.3 million.

The White House says the program will boost economic growth in the third quarter by 0.3 to 0.4 percentage points due to increased sales, and fourth-quarter production increases from auto makers replacing depleted inventories will help sustain an increase in that period’s GDP. The program also is expected to save 42,000 jobs in the second half of 2009, the White House says.

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