(Source: Time; Autoblog)

With 690,000 vehicles sentenced to one final gargle of sodium silicate, thanks to the now-defunct Cash for Clunkers program, demolition-derby drivers seem to have been left holding the short end of the driveshaft. What the government seems to have forgotten is that many cars, hobbling and sputtering as they near death, prefer to make one final trip to the local county fair (assuming they escape a 24 Hours of LeMons team). There, stripped of glass and with fuel tanks moved safely inward, the clunkers die an honorable death smashed gloriously to pieces in front of large (and often well-hydrated), cheering crowds.

There’s at least one group of people who are happy Cash for Clunkers is over: demolition-derby drivers. Participants in these events, in which drivers smash into one another until there’s only one engine left running, don’t enjoy the sight of old cars going out of commission without making a pit stop at the county fairground. “Obama is an anti-demo-derby guy,” says Tory Schutte, head of the Demolition Derby Drivers Association. “He’s targeting the cars we’ve been using.”

There’s at least one group of people who are happy Cash for Clunkers is over: demolition-derby drivers. Participants in these events, in which drivers smash into one another until there’s only one engine left running, don’t enjoy the sight of old cars going out of commission without making a pit stop at the county fairground. “Obama is an anti-demo-derby guy,” says Tory Schutte, head of the Demolition Derby Drivers Association. “He’s targeting the cars we’ve been using.”

There are an estimated 3,500 derbies in the U.S. each year, and they tend to be the main attraction at county fairs, where attendance has hit record highs in many places this summer. “It’s been a stellar year for fairs across the country,” confirms Marla Calico, spokesperson for the International Association of Fairs & Expositions.

(Source:  The Transport Politic)

It would be nice to imagine effective mass transit connections at high-speed terminals, but they are not necessary to build ridership. Rather, we should focus on concentrating high-intensity development in station-area zones.

As the debate over spending on high-speed rail evolves into a full-fledged argument, opponents have focused in on the matter of connectivity to dispute the notion that U.S. railways would attract enough riders. American cities suffer from inadequate transit, and the thinking goes that people would as a result continue to choose auto and air travel even if high-speed trains provided excellent intercity service. The conclusion of this line of reasoning is that the government should invest in urban transit before it moves on to high-speed rail, though it should be noted that many of the same people fighting rail on these grounds have previously stated their opposition to spending on public transportation.

I discussed the basic fallacy in this argument last week — namely, that intercity and urban travel markets are different and that we have a responsibility to invest in both; we cannot simply abandon efforts to improve the ability of people to move between cities. But the point raised by rail opponents deserves to be adequately addressed. Will rail find riders even if no transit is available in the environs of stations? Should we invest in a travel mode that has been successful in densely developed regions in Europe or Asia when the U.S. is so sprawled out?

National Public Radio broadcast a sob story from a woman who traveled on Amtrak from Greensboro to Raleigh, North Carolina, only to find what she claimed was “no” bus service at the arrival station, requiring her to walk “along broken pavement on a street without a sidewalk” and then wait 15 minutes for public transportation. She stated that this process was so difficult that she would probably drive the next time she took the trip because of the difficulty of the end of the commute. The story’s conclusion was that the woman’s situation exemplified the state of transit in many cities and that future rail ridership might be hampered by these problems.

Leave behind for a moment the fact that the bus she took stopped literally one block away from the station, that it runs every 10 to 15 minutes throughout the day, that is it free, and that it serves Downtown Raleigh’s major museums the poor lady was hoping to visit with her nephew. The bus would qualify as good transit service in most American cities, so the woman’s experience may be more a reflection of the city’s bad signage and her limited experience in riding the bus than some systematic problem in transit provision.

Click here to read the entire article.

(Source: Time)

Time.com has featured the plight of an airline passenger, whose problems with the airline (Delta) started with a lost bag duringa  recent trip.  The efforts of the passenger and his multiple attempts to get reunited with his lost baggage are not so uncommon for many travelers.   Thousands of passenger go through similar ordeals and experience the agony of poor service and outdated operational systems, sucking up hours of their day(s), while waiting for airlines to do something to solve their problem. But what makes tihs Time.com story unique is the fact that the passenger in question happens to be a reporter and had a chance to air this miserable handling of the problem by Delta staff on a reputed platform.  It is appalling to see what a passenger has to endure,  that too when he is not the one who caused the problem in the first place.  What’s more pathetic is the fact that the Delta spokeswoman seems to be clueless about what reporting mechanisms are in place for her company to receive a customer’s complaint.  Shame on you, Delta!

Image Courtesy: Apture

Here are some excerpts from the Time.com article:

This is not a story about lost luggage. It’s a story about who to call at the airlines when you feel you’ve been mistreated. The answer, increasingly, is no one.

But it starts with a lost bag — the black duffel Delta Airlines lost on my recent trip from Kansas City to New York City after a nightmarish day of travel: a canceled flight on a perfectly clear morning; a cumbersome rerouting through Atlanta; arrival at LaGuardia after 6 p.m., more than five hours late. When my bag failed to show up, I faced yet another missed connection: to the bus I needed to catch for the two-hour ride to my final destination. So rather than wait in line at the lost-luggage counter, I took a phone number to call in the report later. Which I did — only to be told sternly that lost-baggage reports cannot be taken over the phone, only in person at the airport.

This seemed patently unreasonable. Delta had put me through a lot of trouble: canceling a flight, adding five hours of flying time to my day, losing my luggage. All I asked was the same courtesy accorded any passenger whose bag was lost by the airline: its return free of charge. But after three calls to the baggage folks, the best I could do was get the bag tracked (it eventually made it to LaGuardia). I was told that I had to either pick it up myself at the airport or pay a hefty delivery charge. Three times I asked for a supervisor to whom I could make an appeal. Three times I was told the person I was talking to was a supervisor. (Big labor news: at Delta Airlines, everyone is a boss!) Finally, I asked for a customer-service number so I could lodge a complaint. That’s when I found out how the airlines really feel about customer service: Delta no longer has such a number. An unhappy passenger’s only recourse is to go to the website and write an e-mail.

I spent half an hour filling out the online form, sent off an e-mail and got this response: “We are sorry but this service is unavailable at this time. Please try again later.” I managed to send the e-mail on a second try the next day. Still, I wanted a live human being to hear my case sooner. I called the main reservations line and wheedled a number at Delta’s corporate headquarters in Atlanta. But that only elicited a brusque gentleman who quickly swatted away my complaint. “That is Delta Airlines policy,” he said. “You just don’t like the policy.”Actually, airlines break their own policies all the time. Indeed, one of the few redeeming features of dealing with airlines is that, if you’re persistent and persuasive enough, you can usually find a representative willing to find you a seat on that sold-out flight, waive a change fee, ease your outrage by upgrading you to first class or give you a free meal voucher. When my flight was canceled, Delta waived the usual $15 fee on checked luggage. It’s actually smart business; even small gestures go a long way toward defusing consumer wrath.

At least, that’s the way it used to be. The major carriers have, quietly, made it steadily more difficult to air your complaints to a live human being. “The airlines don’t want to talk to their customers,” says John Tschohl, a consultant to businesses on customer service. American Airlines stopped taking customer complaints by phone several years ago, according to a spokesperson; putting the complaint in writing, he insisted, is more efficient. United used to have a customer-support number but dropped it “some months ago,” according to a reservations agent. (A corporate spokesperson didn’t return several phone calls asking for confirmation.) Even the few airlines that still have customer-service numbers, like Continental and Southwest, tuck them away deep within their websites, where only the truly obsessive can find them.

A Delta spokeswoman seemed perplexed by the whole question. First she said simply, “We direct customers to our e-mail.” After more checking, she reported that Delta does have a customer-care option on its toll-free number. When I couldn’t find it, she checked once more and clarified: the customer-care line is found on Delta’s main corporate phone number — but that number is not publicized and “it is not suggested” that customers call it. A representative at that number said they do not take customer complaints and directed me to the website.

Click here to read the entire article.

(Source: NPR)

Today, NPR had an interesting coverage of DC’s newest addition to its growing biking infrastructure.  Just outside Washington, D.C.’s central train station, construction is under way on a sleek, modern, glass-and-metal bike garage. Here is the audio snippet (via Apture):

“Some people say it’s a half-football or a shell,” says Mazen Soueidan, the project manager. “It has four sides [with] scalloped shells that overlap.”

Once completed, the Bikestation will hold 130 bikes, lockers and a small shop for repairs. Located next to the Metro subway exit at Union Station, the system will provide secure bike storage for commuters who want to cycle through Washington once they arrive from “feeder” cities like Baltimore.

Image courtesy: The City Fix DC

Of course, part of the appeal of bicycling is convenience — you can lock a bike to pretty much anything.

But if you lock your bike to a parking meter, you might come back to find it’s missing a seat or wheels, or it’s just gone. Soueidan says theft was an issue even while building the bike garage.

Set to open in October, the Bikestation will require either an annual membership or a daily usage fee.

Paine says introducing the system to Washington is part of a larger shift toward “dispelling the notion that the car is an essential part of our daily lifestyle.”

John Ciccarelli of Bicycle Solutions in San Mateo, Calif., agrees. “What’s growing is acceptance that the bicycle is a mode of transportation as well as recreation,” he said.

Image Courtesy: NPR - Levered arms inside the bike garage allow bicycles to be stored one on top of the other.

Click here to read the entire article.

(Source: PBS’ Blueprint America)

The majority of American goods are transported by trucks, even though freight trains are greener and more fuel-efficient. Where should America be placing its bets for moving our economy and what would you personally sacrifice for it?

Blueprint America — with NOW on PBS — in a report with correspondent Miles O’Brien looks at the massive amount of freight moved throughout the country — mainly by trucks on an aging highway infrastructure that’s crumbling and bursting at the seams. With projected population growth and a rebounding economy, experts say it is only going to get worse.

So as Congress begins a major rewrite of the nation’s transportation laws, many are asking if it is time to redirect freight traffic off congested highways onto more environmentally friendly and fuel efficient railroads. Sounds good, but there is a catch. Unlike highways that receive public funding, railroads are private. Should taxpayers sink public money into a private railway system? And where should the money come from?

Blueprint America Correspondent Miles O’Brien looks at the contemporary needs, challenges, and solutions for transporting vital cargo across America, and how those decisions affect the way you live, work, and travel.

(Source:  Time)

Q’Orianka Kilcher has never pumped a gallon of gasoline into her car. Never. Then again, she’s never owned a car that needed gasoline. You could say she is at ground zero of the ZE, or zero-emission, vehicle future.

A 19-year-old actress living in Santa Monica, Calif. (she played Pocahontas in the 2005 movie The New World), Q’Orianka (pronounced Quor-ee-anka) is on her second hydrogen-fuel-cell car, a Honda FCX Clarity, a four-door with a 200-mile range. “I don’t think I will ever buy a gas car,” she says. “I can go everywhere I want to go with this. Plus, it’s a guy magnet.”

Auto-marketing gurus take note: the brave new world of ZE cars is here, ready or not, and please make them sexy.

“ZEs are an entirely different paradigm,” says Stephen Ellis, manager of fuel-cell-vehicle marketing for American Honda Motor Co. in Torrance, Calif. Ellis manages the rare $600-a-month leases (including free hydrogen fill-ups) for the FCX Clarity. “Knowing how to integrate these new technologies into existing lifestyles and then building new infrastructures to make it work is the trick,” says Ellis. “It took a hundred years to create the gasoline infrastructure; this will be much faster.”

There are three types of zero, or near zero, emission cars: electric plug-ins, hybrid plug-ins and hydrogen fuel cells (which create power by having oxygen and hydrogen pass over electricity-generating electrodes). But each major automaker has its own take on which advanced technology will win 10 years down the road.

Nissan, for example, is pedal-to-the-metal with pure electric cars, having skipped fuel-cell technology altogether. It considers “interim hybrid technology,” like Toyota’s successful Prius, a mere passing phase. “The market-share winner will be the one that offers affordable, mass-market, zero-emission vehicles with a zero payback period for premium technologies,” says Mark Perry, director of the product planning and strategy group for Nissan North America.

In contrast to Nissan, Honda has passed up pure electrics, preferring instead to bank on lower-cost hybrids (Civic and Insight) and hydrogen fuel cells. Ellis, however, claims no distinction should be made between “FCs” and electrics, since a fuel-cell car is basically an electric car powered by hydrogen-created electricity.

Then there is Toyota, the 800-pound hybrid gorilla. Toyota has yet a third route to success: muscling up on its hybrid strength.

“We believe in not being first to market but being best to market,” says Mary Nickerson, who is in charge of advanced-vehicle marketing at Toyota Motor Sales, also in Torrance. Last year, Toyota reached the 1 million sales mark with its Prius hybrid (gas-powered with fuel-saving electric technology).

“Our strategy is to be the hybrid masters, no pure electrics, and to explore fuel-cell technology,” says Nickerson. “We feel it’s going to take a lot more than one technology to make this new market work.”

Some 21% of consumers will not consider a pure electric car because of the need to plug-in at home, according Nickerson. “We believe that 10 years out, the winners will be all new technologies, but hybrids will be the largest winner of them all.”

Then again, as Honda’s Ellis says, “It all depends on the price of gas.”

Click here to read the entire article.

(Source: CNN)

We have all heard numerous stories about the bad treatment meted out to passengers by the airline staff and airline managements around the country. Among many such stories, one recent incident got a lot of scrutiny and prompted Government action.   On August 8, Continent ExpressJet 21816 enroute to Minneapolis from Houston,  with 47 passengers onboard was left waiting for clearance overnight on a tarmac in Rochester, Minnesota.

As the hours — going on six of them — passed, he said the air in the ExpressJet for Continental Airlines cabin grew rank. The two babies on board cried. The toilet filled and stopped flushing. No food was served and the puddle-jumper seats made sleep, for him, impossible. All the while, the airport was visible from the plane.

The much-publicized story of Flight 2816, diverted to Rochester because of bad weather while en route to Minneapolis from Houston, Texas, has brought to the forefront a growing demand to institute passenger rights.

Advocacy groups are fielding calls, gathering momentum and preparing for a September 22 hearing in Washington. One organization recently bought cable television ad time hoping to reach President Obama on his vacation and earn his support, just as a bill to protect fliers from such incidents heads to the Senate floor.

Since the Rochester incident, there have been other tarmac strandings. Passengers on a Sun Country Airlines flight were trapped for about six hours on August 21 while at JFK International Airport in New York. That prompted the airline’s CEO to announce last week a four-hour maximum deadline for tarmac sittings, Minnesota’s Star Tribune reported. The first “massive tarmac stranding” to spark outcries and stir up calls for legislation came in January 1999, said Kevin Mitchell, chairman of the Business Travel Coalition. That was when about 3,500 passengers were trapped during a snowstorm for up to 13 hours on Michigan’s Detroit Metro Airport tarmacs, he said.

The 2007 Valentine’s Day crisis involving JetBlue flights, which included strandings of up to 10 hours at JFK International, in Mitchell’s opinion eventually cost the then-CEO his job.  A couple of months before that mess, Kate Hanni was one of the passengers caught up in a December 2006 storm fallout in Texas that left her and her family on an Austin, Texas, tarmac for more than nine hours.

“People miss funerals, weddings, cruise ships, business meetings — it has an impact on their lives,” said Hanni, whose outrage about that air travel experience pushed her create FlyersRights.org.

“And it’s not just a customer service issue,” she continued, mentioning overflowing toilets and people with diabetes or other medical conditions. “It’s about safety, dignity and well-being.”

In late July, the U.S. Senate Commerce Committee passed the Federal Aviation Administration Reauthorization Act, which includes the Airline Passengers Bill of Rights, first written in 2007 by Sens. Barbara Boxer, D-California, and Olympia Snowe, R-Maine. The FAA reauthorization bill will next move to the Senate for consideration.

Calling attention to the frustrations of flying is what Hanni, 49, is all about. If someone phones while trapped on a tarmac, she’ll start ringing the airline and airport managers, demanding help. If the response she gets is insufficient, she threatens and is poised to call media. Since the Rochester incident earlier this month, she said she’s been interviewed more than 50 times.

In June, 278 airplanes sat on tarmacs for more than three hours, according to a consumer report released by the DOT. The department’s Bureau of Transportation Statistics shows that 42 of the June flights sat on tarmacs for four hours or more.

Click here to read the entire article.

TransportGooru Musings: If you are one of the poor souls who was stuck for hours inside a metal tube, sign the petition and join teh crusaders in the fight for an Airline Passengers’ Bill of Rights (via flyersrights.org) .
http://www.petitiononline.com/airline/petition.html

(Sources: Seattle PI via Autobloggreen)

With more and more electric car makers ready to blitz the market with Plug-in Hybrids Electric Vehicles and Plug-In Electric Vehicles, it is time the local communities took a stock of the supporting infrastructure necessary for feed these voltage-hungry vehicles.  The Seattle PI takes a look at the readiness of Seattle to handle the surge of electric vehicle.   Here are some interesting excerpts from the article:

Is Seattle charged for electric cars? Local electric car boosters think so, event though electric cars — other than such hybrids as the Prius — have not captured the fancies of more than a few people in the past 20 years.

“There’s a perfect storm this time around,” said Steve Lough, president of the Seattle chapter of the Electric Vehicle Association, who drives a 2000 Honda insight gas-and-electric hybrid.

On Aug. 5, the federal government announced that it will provide almost $100 million to install roughly 2,500 electric vehicle chargers each in the greater metropolitan areas of Seattle, Phoenix, Nashville, Portland and San Diego.

Roughly $20 million will go to Seattle for 2,550 chargers, Read said.

About 40 firms, including Nissan and eTec, will match the federal appropriations. Local governments will not be required to provide matching money, Read said.

This experiment is timed with Nissan’s planning to sell a new electric car — the “LEAF” — in late 2010. It hopes to initially sell 5,000 cars evenly split among the five metro areas.

This timing roughly coincides with General Motors’ plans to put possibly 10,000 of its all-electric “Volt” cars on the market in late 2010.

By comparison, Seattle has the nation’s largest chapter of the Electric Vehicle Association — with 230 members.

Local owners said recharging electric cars lead to different habits from refueling conventional vehicles.

“You basically plug it in whenever you park it,” said Dan Davids, owner of a 2002 Toyota RAV4-EV and president of the nationwide Plug-In America organization.

Fulling charging a car with a conventional 220-volt installation could take four to eight hours. So-called “fast” chargers with extra oomph could take 15 to 30 minutes to do the same.

But local electric car owners said those figures are misleading.

These cars rarely need full charges with the accompanying long repowering times, they said.

Electric cars are usually charged nightly at their homes. If recharged at business locations, the new power mostly “tops off” a battery usually containing most of its original charge, they said. The same “topping off” would occur when cars would be recharged at businesses.

Between the small amounts of electricity and the lack of wear-and-tear on moving engine parts, they estimated it costs about 2 cents a mile to operate their vehicles.

The three are optimistic that a major hurdle to owning electric cars could be finally conquered — the initial price tag. The Tesla Roadster — with about 700 sold so far — goes for $109,000. Many models of electric cars have been in the $50,000 to $100,000-plus range. “You’re financing the research and development for the next generation of technology,” Morrison said.

The Volt’s expected price tag is about $40,000 with a federal tax credit of $7,500 earmarked for early buyers. The same tax credits will go to buyers of the first LEAFs, which are expected to go for $25,000 to $33,000.

Click here to read the entire article.

(Sources contributing to this hybrid report: Green Car Congress; Fast Lane – Sec. LaHood’s Blog; Autoblog; Detroit News; LA Times; Business Week)

Finally, the curtains came down on the Cash For Clunkers program on Monday @8PM.  After much hype and chaos the program closed its doors with a mixed record.  Secretary LaHood calls is a great success while some others say no pointing to the choas around the program’s final days when the computer systems crashed as the dealers tried to submit their transcation data for reimbursements. In anycase, the program has left a wonderful memory in the minds of many economists and possibly underlined the fact that indeed the Government has some clever tricks up the sleeves to stimulate a lagging economy, especially for the automakers whose future looked very gloomy before this program came in to place.

After one month, an extra $2 billion in funding and an absolute mess of paperwork, Cash for Clunkers has finally petered out. The final numbers are in and the program resulted in 700,000 sales totaling $2.877 billion in $3,500 and $4,500 vouchers handed out at dealerships across the nation. An additional $100 million was set aside for administration costs, or about $144 for every claim processed, leaving $23 million in the kitty.

The program offered consumers rebates of $3,500 or $4,500 off the price of a new vehicle in return for trading in their older, less fuel-efficient vehicles to be scrapped. The trade-in vehicles needed to get 18 miles per gallon or less.

Here are some interesting snippets collected from various sources around the web (thank me for making it easy for you).

• The US Cash for Clunkers program (CARS) ended Tuesday night with 690,114 dealer transaction submitted worth $2,877.9 million.
• Eighty-four percent of consumers traded in trucks and 59% purchased passenger cars.
• The average fuel economy of the vehicles traded in was 15.8 mpg and the average fuel economy of vehicles purchased is 24.9 mpg: a 58% improvement.
• Cars purchased under the program are, on average, 19% above the average fuel economy of all new cars currently available.

Image Courtesy: Green Car Congress

Green Car Congress notes that Toyota reaped the largest percentage of sales under the CARS program (19.4%), followed by GM (17.6%) and Ford (14.4%). Honda came in fourth at 13.0%.

The top 10 vehicles purchased under the program were:

1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus FWD
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD

Top 10 Trade-in Vehicles:

1. Ford Explorer 4WD
2. Ford F150 Pickup 2WD
3. Jeep Grand Cherokee 4WD
4. Ford Explorer 2WD
5. Dodge Caravan/Grand Caravan 2WD
6. Jeep Cherokee 4WD
7. Chevrolet Blazer 4WD
8. Chevrolet C1500 Pickup 2WD
9. Ford F150 Pickup 4WD
10. Ford Windstar FWD Van

David Kiley at Business Week says that the annualized selling rate for the auto industry in August is expected to be about 15.5 million, thanks to C4C, according to Wall Street firm Goldman Sachs. That would be a 16% improvement year over year, and nearly a 40% increase from July.  Goldman fully expects a “pay back effect” in September following the program. The firm also expects the monthly selling rate to remain above 10 million for the rest of the year, with a final sales tally of about 10.5 million, with a tally of 12 million next year. Some other analysts have pegged next year’s selling rate at 12.5 million to 13 million.

David also observed that while the program did its job, its real contribution has been less than the hype. Cash for clunkers did spur sales. It sold 690,000 cars and many were compacts like the Ford Focus and Honda Civic. So it did accomplish the mission of scrapping some old iron and selling some more efficient cars. That said, the boost will amount to less than a 3% increase for the year. That’s hardly the windfall that Germany achieved from a similar program, which pushed sales up an average of 30% a month since March. There may also be a hangover in car sales in the U.S. Edmunds says that purchase intent is now down 11% from June, meaning that fewer people are looking at new cars. So sales could slump in the coming months. In fact, J.D. Power says that more than 70% of sales may have happened later this year even if the government hadn’t spent $3 billion on the clunker program. One other point: Toyota was the biggest beneficiary, getting 19.4% of sales, with General Motors getting 17.6% and Ford getting 14.4% of sales from the program.

David Kiley says that “Clunkers” was good policy for a number of reasons (all of which I agree wholeheartedly):

1. There is no question that the program brought many car buyers off the sidelines, and gave automakers, and dealers, a shot in the arm not only in terms of sales of the vehicles that qualified, but in vehicle sales in general as the program brought lots of new eyeballs to the entire showroom, not just the models that qualified.
2. The $3 billion had direct impact on the economy, keeping people working, increasing production and shift work at auto companies and parts makers. Unlike other pieces of economic stimulus, the money was allocated and went directly into the economy. The money isn’t sitting on a shelf waiting for building permits to make it through local bureaucracies.
3. Clunkers put a spotlight on the whole idea of trading up in fuel economy. Lots of old Explorers got swapped for Ford Focuses and Toyota Corollas. I believe U.S. public policy must move toward engineering a substantial change in transportation. There needs to be more policy that persuades people to choose their vehicles in a smarter way, to leave a smaller carbon imprint. This Clunkers bill was, perhaps, a start of a recurring series of moves that will create a more fertile atmosphere and public discussion about this.
4. Perhaps the undeniable efficiency of Clunkers will influence policy-makers and lawmakers the next time they draft a stimulus package. Economist Martin Feldstein warned us when the stimulus was being debated that it was not targeted nearly enough to consumer spending. His notion, which I agreed with, was that money should have been highly targeted to spending on specific high-impact sectors—cars, major appliances, home improvement.

The USDOT’s press realease observed that according to a preliminary analysis by the White House Council of Economic Advisers, the CARS program will (1) Boost economic growth in the third quarter of 2009 by 0.3-0.4 percentage points at an annual rate thanks to increased auto sales in July and August. (2) Will sustain the increase in GDP in the fourth quarter because of increased auto production to replace depleted inventories. (3) 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.

Sec. LaHood says “This is a win for the economy, a win for the environment and a win for American consumers”.  He noted in his blog “CARS’ economic success has been some of the most heartening news. Both Ford and General Motors haveannounced production increases for their third and fourth quarters due to heightened demand for fuel-efficient vehicles. Honda is also increasing production at its U.S. plants in East Liberty and Marysville, Ohio and in Lincoln, Alabama.  The program has been a lifeline to auto manufacturers and dealers to be sure. But it’s also had a visible ripple effect through communities and related industries. Because of CARS, scrapyards are selling clunker waterpumps, batteries and other parts. Credit unions and banks are processing thousands of car loans. Repairmen, mechanics and sales staff are picking up additional work. CARS has truly been a winning deal for everyone. ”   The USDOT’s press release also offered the following statistics:

Vehicles Purchased by Category

• Passenger Cars: 404,046
• Category 1 Truck: 231,651
• Category 2 Truck: 46,836
• Category 3 Truck: 2,408

Vehicle Trade-in by Category

• Passenger Cars: 109,380
• Category 1 Truck: 450,778
• Category 2 Truck: 116,909
• Category 3 Truck: 8,134

84% of trade-ins under the program are trucks, and 59% of new vehicles purchased are cars. The program worked far better than anyone anticipated at moving consumers out of old, dirty trucks and SUVs and into new more fuel-efficient cars.

Average Fuel Economy

• New vehicles Mileage: 24.9 MPG
• Trade-in Mileage: 15.8 MPG
• Overall increase: 9.2 MPG, or a 58% improvement

Cars purchased under the program are, on average, 19% above the average fuel economy of all new cars currently available, and 59% above the average fuel economy of cars that were traded in. This means the program raised the average fuel economy of the fleet, while getting the dirtiest and most polluting vehicles off the road.

Image Courtesy: Green Car Congress

Industry experts are now saying that after the ‘party’ of the Cash for Clunkers scheme, the auto industry will now experience a ‘hangover’, with a large drop in sales due to the lack of incentives. Auto research firm Edmunds.com predicted Wednesday that the industry “is likely to experience a painful hangover” after the monthlong cash-for-clunkers party. “People rushed into purchases that many would otherwise have made later this year. The result will be lower sales in the weeks to come,” said Edmunds Chief Executive Jeremy Anwyl.  The number of people who intend to buy a new car in the next two months was down 50% from the peak of the clunkers program and 11% from the average in June, the firm said.

Figures released Wednesday showed that California auto dealers requested the most in reimbursements, $326.8 million, followed by those in Texas, New York and Illinois.  Timely payment to dealers, some of whom are owed more than $3 million, will be a key measure of the program’s effectiveness, industry spokesman Wood said.  Michigan ended up with $132.4 million in vouchers sought under the cash for clunkers program, the eighth highest among states. California was first at $327 million followed by Texas, New York, Florida Illinois, Pennsylvania and Ohio.