The federal government's cash-for-clunkers program (official acronym: C.A.R.S.) kicked off on July 1st, and it gave the auto industry its best sales month in nearly a year. Total light vehicle sales for July were just shy of 1 million units, a milestone the industry hasn't topped since August 2008.
According to NHTSA, some 245,000 consumers (through August 7th) took advantage of the $3500 and $4500 federal cash incentives. Even so, July auto sales surpassed June figures by only 138,000. Presumably, then, quite a few of the clunkers' cash recipients would have bought a new car anyway.
Even with the fat federal stimulus, the 998,062 auto sales were well below the 1,136,476 recorded in July 2008 - a figure that, at the time, was considered pretty dismal. How little did we know.
Since consumers all but drained the feds' initial $1 billion allocation in only a month, Congress has tossed another $2 billion (hey, it's only money) into the kitty. The program is scheduled to run until November, but some industry observers expect the dough to run out as early as Labor Day, with additional funding unlikely. So, while carmakers may enjoy a similarly stimulated August, come fall, the hangover from this party could be nasty.
MAJOR MOVERS (sales increases/decreases of 25% or more versus June)
10 Big Winners in the Cash-for-Clunkers Bonanza
There's some confusion about which cars and trucks saw the most clunker-cash-subsidized sales (because the government reports separate models by powertrain), but it's clear these clunkers-cash-eligible models enjoyed the biggest volume gain, percentage-wise, over June.
Chrysler PT Cruiser +271%
Jeep Patriot +192%
Jeep Compass +183%
Dodge Avenger +143%
Dodge Caliber +121%
Chevrolet Equinox +164%
Chevrolet Aveo +124%
Pontiac G3 +114%
Hyundai Elantra +110%
Scion xD +109%
The top 3 sales gainers in July were all from Chrysler, which added its own money to effectively double the government incentive, driving new-car prices down into four figures for some buyers. At General Motors, the relatively high-mpg new 2010 Chevrolet Equinox benefited from a very timely arrival, while artificially stimulated demand for the tiny Aveo even spilled over onto its lame-duck Pontiac twin, the G3.