Even more so than in July, the federal government's blizzard of car-buying incentive cash -- $3500 or $4500, depending on the trade-in and the new vehicle purchased -- made new-car dealerships an unlikely oasis in the U.S. economic desert of mid-2009. August's 1,262,189 new-vehicle sales was a whopping 47 percent higher than the 860,101 units recorded in June (the last pre-Clunkers month). On the other hand, the federally stimulated figure was barely ahead of last August's 1,250,117 units, which at the time was considered quite dismal.
Considering the current climate, Cash for Clunkers was a bonanza for new-car dealers, although that hasn't stopped them from complaining loudly about how long it's taking the government to reimburse them for the rebate money they paid out. Many have been all but cleaned out of their inventory, but that's not likely to be much of a problem because now that the Cash for Clunkers program has ended, everyone expects September sales to slow to a crawl.
[Because July sales were similarly inflated by Cash for Clunkers, the following August sales results are compared to year-ago figures. Source: Automotive News]
10 CARS THAT CLEANED UP
The following models were able to at least double their August 2008 sales performance.
Volvo V50 +202%
Chevrolet Equinox +185%
Honda Fit +183%
Kia Sportage +166%
Chevy Aveo +159%
Nissan Versa +132%
Ford Fusion +132%
Hyundai Elantra +116%
Mercury Milan +112%
Range Rover +103%
Obviously, the Range Rover wasn't a Clunkers beneficiary (it benefited instead from a 2010 update), but the other models on this list enjoyed a huge boost thanks to government rebates. The fact that the Equinox also was freshly redesigned helped turbocharge its results. The Volvo V50 had no such help, but it's important to remember that its huge percentage increase comes on relatively small volume.
TIPPING THE DOMESTIC/IMPORT BALANCE
With small cars benefiting disproportionately from Cash for Clunkers, it's perhaps not surprising that August saw import brands take their largest-ever share of the U.S. new-car market, with 6 of 10 new cars sold bearing an import nameplate. The federal incentives subsidized the purchase of more Toyota Corollas than any other car. For August, Toyota's sales were up by 6%, Honda/Acura recorded a 10% increase, and Hyundai/Kia and Subaru of America both tallied much larger percentage gains (+52%). Conversely, two of the three U.S. manufacturers saw declines. Maybe you can guess which two those were. General Motors (domestic nameplates) fell 20% versus year-ago totals -- although the company points out that last August it had a pretty big month thanks to an Employee Pricing promotion -- and Chrysler, whose bankruptcy filing shut all its auto plants for a while and left it with depleted supplies of some suddenly in-demand models, was off by 15%. Only Ford, America's favorite not-bankrupt car company, was really able to capitalize on Cash for Clunkers in August, notching a 17% gain (excluding Volvo).