(Source: Green Car Congress)

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Buoyed by the US government’s CARS (“Cash for Clunkers”) program, US auto sales slowed their decline in the US in July, dropping on 12.1% to 997,824 units, accordingto summary figures from AutoData. Passenger car sales dropped 10.6% to 554, 527 units, while light truck sales dropped 14.1% to 443, 297 units. All comparisons are by volume. As a result, the SAAR for July surged to 11.24 million units; US SAAR had been below 10 million since January.

Hybrids had an especially good month, with reported sales jumping 31.8% year-on-year to 35,429 units, representing a 3.55% new vehicle sales market share for the month—the highest monthly share yet. Hybrid gains were largely due to an increase in Prius sales (up 29.7% to 19,173 units) and Ford hybrids (up 323% to 5,353 units).

Image Courtesy: Green Car Congress - Hybrid sales rise, thanks to Cash for Clunkers

According to the Alliance of Automobile Manufacturers, CARS sales reflected demand for more fuel-efficient vehicles:

• Ford reported a 9 mpg increase from trade-in vehicle to new vehicle purchase;
• GM reported a 54% increase in small car sales since the CARS program was launched;
• 57% of Mazdas sold so far under the program were fuel-efficient Mazda 3’s;
• 78% of Toyota’s CARS sales volume consists of Corolla, Prius, Camry, RAV 4 and Tacoma, which average a combined 30 mpg;
• Volkswagen reports more than 60% of its CARS sales are clean diesel Jetta TDIs which get an EPA combined 34 mpg.

Image Courtesy: Green Car Congress - Total Reported Monhtly Sales of Hybrid Vehicles in US

Here is a quick snapshot of sales volume by manufacturer (in the hybrid category):

• GM delivered a total of 1,487 hybrid vehicles were delivered in the month, up 36.3% year-on-year.
• Ford’s fuel-efficient vehicles pace July sales results. Ford had an exceptionally strong month with hybrid sales, up 323% year-on-year to 5,353 units.
• Toyota Motor Sales (TMS) posted July sales of 24,295 hybrid vehicles, up 19.3% from the same period last year.
• Total sales of the fuel-efficient Honda Civic increased 3.1% to 30,037. Sales of the Civic Hybrid, however, plunged 71.8% to 969 units year-on-year. The new Honda Insight hybrid posted 2,295 units.
• Nissan sold 1,030 units of the Altima hybrid, up 44.1% year-on year.

Our friends at Jalopnik yesterday published a revised list of ten most purchased vehicles under the Cash for Clunkers program:

1. Ford Focus

2. Toyota Corolla

3. Honda Civic

4. Toyota Prius

5. Toyota Camry

6. Ford Escape FWD

7. Hyundai Elantra

8. Dodge Caliber

9. Honda Fit

10. Chevrolet Cobalt

Click here to read the entire report.

(Source: AP Via Yahoo & Time)

“Cash for clunkers” could have the same effect on global warming pollution as shutting down the entire country — every automobile, every factory, every power plant — for an hour per year. That could rise to three hours if the program is extended by Congress and remains as popular as it is now.

Climate experts aren’t impressed.

Compared to overall carbon dioxide emissions in the United States, the pollution savings from cash for clunkers do not noticeably move the fuel gauge. Environmental experts say the program — conceived primarily to stimulate the economy and jump-start the auto industry — is not an effective way to attack climate change.

“As a carbon dioxide policy, this is a terribly wasteful thing to do,” said Henry Jacoby, a professor of management and co-director of the Joint Program on the Science and Policy of Global Change at MIT. “The amount of carbon you are saving per federal expenditure is very, very small.”

Officials expect a quarter-million gas guzzlers will be junked under the original $1 billion set aside by Congress — money that is now all but exhausted.

Calculations by The Associated Press, using Department of Transportation figures, show that replacing those fuel hogs will reduce carbon dioxide emissions by just under 700,000 tons a year. While that may sound impressive, it’s nothing compared to what the U.S. spewed last year: nearly 6.4 billion tons (and that was down from previous years).

That means on average, every hour, America emits 728,000 tons of carbon dioxide. The total savings per year from cash for clunkers translates to about 57 minutes of America’s output of the chief greenhouse gas.

Likewise, America will be using nearly 72 million fewer gallons of gasoline a year because of the program, based on the first quarter-million vehicles replaced. U.S. drivers go through that amount of gas every 4 1/2 hours, according to the Department of Energy.

Time Magazine reports that initial data released by Department of Transportation, however, shows that so far cash for clunkers has been a green success. The clunkers averaged 15.8 m.p.g., compared with 25.4 m.p.g. for the new vehicles purchased, for an average fuel-economy increase of 61%. On the whole, American drivers are trading in inefficient trucks and SUVs for much more efficient passenger cars. Car manufacturers like Nissan are already retooling some models to improve their fuel economy so they can qualify for the credits. The early numbers were enough to convince California Senator Dianne Feinstein to go from criticizing cash for clunkers as too lax to supporting additional funding for the bill in the Senate. “This program has done much better than we ever thought it would for the environment,” she told reporters on Aug. 4.

It’s called the efficiency paradox: as we get more efficient at using energy — through less wasteful cars and appliances — the overall cost of energy goes down, but we respond by using more of it. In the case of cars, that means driving more. Ultimately our gas bill stays the same, but we spend more time on the road and pump the same amount of greenhouse-gas emissions into the atmosphere. The earth isn’t any better off.

To address the emissions problem directly, we need to look at fuel, not Fords: institute carbon taxes that raise the price of gas. We already know that higher gas prices discourage driving and reduce greenhouse-gas emissions — total vehicle miles traveled in the U.S. declined 3.6% in 2008 compared with the previous year, thanks largely to the sky-high price of gas for much of 2008. (The recession didn’t help, but sharp declines in driving began well before the bottom dropped out of the economy.) As gas prices have fallen in 2009, however, driving has begun to tick back up.

Click here to read the entire article.

(Source: Jalopnik)

Image Courtesy: Jalopnik

Now that the President has signed the “Cash For Clunkers” into a bill, a lot of you may be thinking hard about trading your old meta for a shiny new one.  Through various articles Transportgooru has already discussed in great lengths about the details associated with the Cash for Clunkers, including the eligibility criteria for trading your old vehicle.

To add to that, our good friends at Jalopnik have put together this awesome list (see below), which I think is a must read for anyone who is contemplating a trade under Cash for Clunkers program.  Here is the list in reverse order.

5.) Buy A Clunker Now!

Some unscrupulous sellers may try and convince you to buy a clunker for a few hundred dollars with the promise of being able to trade it in for a $4,500 voucher. In reality, if you haven’t owned your car and kept it running and insured for a year you’re not eligible. Don’t buy a beater unless you want to keep it for a while.

4.) Trade In Your Car Early! –

We’ve read reports on forums of people already taking advantage of the Cash for Clunkers bill. In reality, they’re being taken advantage of. The law has been signed, but the National Highway Transportation Safety Administration hasn’t finalized the rules. It probably won’t go into affect until after July 24th. If you are being offered a “voucher” on your clunker you’re really just getting money for your trade-in, which the dealer can then resell. The most you lose is your car, but the dealer could face a fine of up to $15,000.

3.) Scrap A Car Worth More Than The Voucher

The used car market isn’t great right now, but this doesn’t mean your vehicle doesn’t have some value. Make sure to check the value of your car using a resource like KBB before trading in an older car that, it turns out, is worth more than $4,500 or $3,500 on the open market. Dealers have a greater incentive to sell you a new car and scrap your old one than to get the value of your trade-in “clunker.”

2.) Get Denied For Other Discounts

The voucher program is not designed to be a stand-alone discount program, meaning you’re still eligible for whatever other discounts automakers are offering (and there are a lot of those). With 0% financing and thousands cash back you’re getting cheated if you just get the value of your trade-in off a new car. The average incentive, according to Edmunds, was $2,930 for June. So you could possibly get $4,500 + $3,000 off of a new car.

1.) Avoid Moving Up To A More Profitable Class

If you own a truck or SUV you can use your voucher to trade it in for a car and, likely, get a larger voucher. Many dealerships will want to put you into a new truck because they’re more expensive than most cars, but if you don’t need a truck you can trade your old one in and find an inexpensive car with 10 MPG better fuel economy, which qualifies you for $4,500. For example, if you’ve got a 1991 V6 Ford F-150 you can trade it in for a $15,000 2009 Ford Focus for your kid and get the full $4,500 off, instead of paying upwards of $20,000 for a new truck and only getting a $3,500 voucher.

(Source: New York Times – Wheels Blog, Sec.  LaHood’s Fast Lane Blog, U.S. News and World Report)

First of all, it’s no longer Cash-for-Clunkers. The program is now called the Car Allowance Rebate System (C.A.R.S.).  The program, which President Obama signed into law on Thursday, pays consumers up to $4,500 in credit for trading in their cars or trucks for those that are more fuel efficient. The law allocates $1 billion for the program.

The incentive program begins within 30 days of today’s bill signing by the President. The final day for an eligible purchase or lease is November 1, 2009, or when DOT exhausts the funds set aside for the program, whichever occurs first. The credit is not retroactive prior to the start of the program and cannot be applied toward the purchase of used vehicles.

Of course, there are plenty of regulations to determine what vehicles qualify for the credit. The National Highway Traffic Safety Administration, which is overseeing the program, has put together this Web site to help consumers who would like to participate in the program.

Image Courtesy: USDOT Secretary Ray LaHood's Fast Lane Blog

Today, the Transportation Secretary Ray LaHood wrote on his blog: “This program helps consumers pay for new, more fuel-efficient vehicles when they trade in less fuel-efficient cars or trucks. Stimulating the automobile industry while improving the environment and reducing fuel consumption–these are outcomes the DOT is pleased to support.

Congress and the Obama Administration recognize this is an important time for the automobile industry. And, the CARS program will help boost car and truck sales. Moreover, since the auto industry has improved vehicle safety and reduced vehicle emissions over the years, we are also excited about a program that puts vehicles on the road that are safer, pollute less, and get more miles to the gallon than the vehicles they replace.

CARS will be implemented by DOT’s National Highway Traffic Safety Administration (NHTSA). It’s a new responsibility this department welcomes; I know the folks in NHTSA stand ready to fulfill their new charge.  I encourage everyone to learn more about the program from the website, www.cars.gov, or call NHTSA’s Auto Hotline at 1-888-DASH-2-DOT (1-888-327-4236). ”

The C.A.R.S. rebate does not count on top of the trade-in value of your vehicle. In the F.A.Q. section of CARS.gov: “The law requires your trade-in vehicle to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in vehicle is not likely to exceed its scrap value.”

An Important FYI item: N.H.T.S.A. warns consumers of unofficial C.A.R.S. Web sites that are now popping up, reports USA Today. “Some want a lot of personal information, and talk about consumers being able to pre-register,” said Eric Bolton, a N.H.T.S.A. spokesman. “Consumers don’t have to register for this program at all.”

For those of you who are contemplating the purchase of a new vehicle under this program, here is a wonderful guide put together by the U.S. News and World Report:

10 Things You Should Know About Cash for Clunkers Car Allowance Rebate System”

1. What’s the official definition of a clunker? A driveable car made within the last 25 years, with a fuel economy rating of no more than 18 mpg. To learn more about the combined city/highway fuel-economy of your car, check out the Car Allowance Rebate System site.

2. Here’s how the program works: you trade in your old car for cash towards the purchase of a new, more efficient one. The better the mileage of the new car , the more money you’ll get towards its purchase – either $3,500 or $4,500. Check out Jalponik’s handy chart to figure out how much you might be able to claim.  The minimum combined fuel economy of a new car purchased under the program must be at least 22 mpg, while new small trucks and SUVs have to get at least 18 mpg, and large trucks have to get 15 mpg. The old cars will be salvaged once they’re turned in.

3. Consumers should act fast. The bill provides vouchers for one million purchases, and the window of time is only fron July 1 to November 1. The bill will be revisited in the fall , and some changes may be made at that time.

4. The program will cost $4 billion. Funds will come from TARP.

5. Sorry, would-be entrepreneurs: it’s off-limits to buy an old car and “flip” it for the program – the car must have been insured by the same owner for at least one year before the trade.

6. The environmental idea behind the bill is that it takes old, inefficient vehicles off of the road. But some environmentalists are actually opposed to the bill because it takes functioning cars off of the road before their time is up, and does not permit the vouchers to go towards used vehicles, even if they are more fuel-efficient. Sen. Dianne Feinstein, who sponsored an alternate bill stated that the current version undermines fuel efficiency standards and provides “handouts for Hummers.” On the other hand, some argue that higher fuel standards would disproportionately benefit foreign cars, denying American automakers their much-needed boost.

7. The economic incentive of the bill is to jump-start drowsy auto sales. According to Bloomberg, similar programs worldwide have raised auto sales 25 percent to 40 percent in Germany, 15 percent in China and 8 percent in France.

8. Even if it’s not designed entirely the way environmentalists had hoped, there are still green benefits. Says Treehugger: “One positive effect the bill could have, though, is simply to further advance the presence of ‘fuel efficiency’ as a reward term in the skeptical American consumer market. Yes, hybrids continue to sell, but not to 99 percent of the population. The bill could, albeit in a relatively minor way, serve to advance an attitude that places importance on fuel efficiency in the future.”

9. Cash for Clunkers is expected to have a great impact on the Hispanic community. That’s why the program is getting a celebrity endorsement from Dancing With The Stars’ Cristian de la Fuente and Ugly Betty’s Angelica Vale.

10. As always, buyer beware. It doesn’t make sense to trade in your vehicle unless its value is less than or equal to what you’d get in the program. Edmunds has identified a list of cars that are guaranteed to be worth less than the value of the voucher. You can find it here (PDF). Said ABC News Consumer Correspondent Elisabeth Leamy, “From a strictly consumer standpoint, the Cash for Clunkers program is not a great deal. Yes, if you are bent on buying brand new, you will save money. But the savings are nothing compared with how well you can do by buying a used car.”

(Source: Autoblog, Washington Post,  Detroit Free Press, AFP via Google)

Image Courtesy: Jalopnik

Clears Senate

After narrowly surviving an attempt by Sen. Judd Gregg, R-N.H. to strip it from a war-spending bill, the Cash for Clunkers program passed the Senate yesterday evening. Well, the $106 billion war-spending bill passed the Senate on a 91-5 vote, but the $1 billion scrapping program earlier survived Sen. Gregg’s attempt to have it removed and thus passed, as well. Now the bill makes its way to President Obama, who is expected to sign the bill into law, after which the U.S. Transportation Department reportedly has one month to figure out how the Cash for Clunkers program will be run. Since Congress reduced funding for the program from $4 billion to just $1 billion, it’s expected that the money will run out long before the program is scheduled to end on November 1.

“We are gratified that the Congress delivered on this administration priority, and President Obama looks forward to signing it into law,” according to an administration statement.

Details, Details, Details,

Vehicles purchased after July 1 will be eligible for the refund vouchers worth as much as $4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.

The agency in charge of administering the program, the National Highway Traffic Safety Administration, will work out all the details within 30 days of enactment, according to Rae Tyson, spokesman for NHTSA.

Congress predicts this will result in the sale of about 250,000 new vehicles. The funding is good only until Nov. 1 and could run out before that. In that case, the voucher pro gram — unless Congress ap propriates more — would end.

Consumers would be able to start using the vouchers as soon as the National Highway Traffic Safety Administration finalizes the rules — a process that must conclude within 30 days of the president’s approval.

Under the program, trade-in vehicles, 1984 models or newer, must have average fuel economy of no more than 18 miles per gallon. And the new car or truck must get better gas mileage than the one that was scrapped.

The payoff grows depending on the difference in the fuel efficiencies of the old and new cars. For instance, a new car getting at least 4 more miles per gallon than the old car will be eligible for a $3,500 voucher. A new car getting at least 10 more miles per gallon would get a $4,500 voucher.

To guarantee vehicles are actually roadworthy — and not just sitting on cinder blocks — trade-ins must be registered and insured to the same owner for at least a year.

Kudos & Pats in the Backs

Image Courtesy: Apture

Cash for clunkers proponents in Congress said the subsidies will spur sales.”The simple fact is that we need to get Americans into car showrooms and this is the bill that will do it,” said Rep. Candice Miller, R-Mich., in a statement.

Sen. Debbie Stabenow, D-Mich., said the program will boost jobs in auto states. “This program will provide an economic stimulus at a time when hardworking families need it most,” Stabenow said in a statement.

GM said it had decided to keep 60 of the more than 1,000 dealers with whom it had sought to terminate agreements. The reversals were made after the automaker corrected financial information that was used to evaluate which stores to keep.  Dealers applauded the Senate’s action yesterday, and some got additional good news.  John McEleney, chairman of the National Automobile Dealers Association, hailed the measure, saying it “will boost consumer confidence, get the economy going again and reduce our dependence on foreign oil. Congress is giving consumers a strong incentive to replace their older vehicles with new, more fuel efficient cars and trucks.”

Transportation Secretary Ray LaHood said “The program is an important step forward for America. “It provides incentives for consumers to buy new, more fuel-efficient cars and trucks, providing a boost to the auto industry and protecting jobs, while limiting fuel use and greenhouse gas emissions.”

The legislation comes with number-one US automaker General Motors in bankruptcy and Chrysler emerging from court protection under a government-backed alliance with Italy’s Fiat in the face of plunging auto sales.

Cash for Clunkers Update from Europe (Channel 4 via Autobloggreen)

Several other countries, such as China and Italy, have offered similar trade-in vouchers. And lawmakers point to the success of Germany’s program as indication that vouchers can turn dismal auto sales around.  At the end of the program’s first month, sales in Germany were up 21 percent from a year before. During the same period, U.S. sales slumped 41 percent. Now,  a leading provider of automotive data and intelligence says the European motor industry is showing signs of recovery following the introduction of scrappage schemes on the continent.  According to a new study by Jato Dynamics, the European automotive market may be rebounding ever so slightly from its alarming lows of early 2009.

Though new car purchases are down by just over 13 percent year-on-year, there was actually a mild 2.4 percent improvement in May over April. The German market is now 39.7% up on May 2008 – a 20.3% improvement over last month’s figures. France, meanwhile, is up 11.8% over the figures for April.  “If Germany provides a template for the other markets where scrappage schemes have been introduced, we may be at the very beginning of a period of recovery in Europe. It’s far too early to know what the sustained effects of the incentives will be, but at a time when the industry needs to see some rays of hope, it’s encouraging to witness some improvement ” says David Di Girolamo, Head of Jato Consult. Interestingly, small, fuel efficient hatchbacks are performing better than the rest of the market, which is thought to be due to the various scrapping schemes in Europe.

The US market has steadied somewhat from lows earlier this year but the sales pace in May remained 33.7 percent below that of one year ago.  Let’s hope the American consumers will follow their European counterparts in boosting the vehicle market> Eeven if it is only a liitle, the market can use any push to build its recovery.

(Source: Detroit Free Press, The Detroit News, The Auto Channel, The Examiner, EEtimes.com)

Cash for Clunkers hit a speed bump Tuesday, June 16, 2009, in the U.S. Senate. It appears some Senators have “bailout fatigue” in general and “auto industry bailout fatigue” in particular. According to The Detroit News, Republican Senators are pushing back, citing the $85 billion in aid already provided to prop up ailing and bankrupt GM and Chrysler.

Image Courtesy: Apture

Some Democrats, including Diane Feinstien (D-California) also oppose the bill in its current form because they think it does not go far enough to improve fuel economy of vehicles on American Roads (there are, of course, Republicans in the opposition, but they oppose the measure because they think we’ve already spent too much money on the auto industry). As reported earlier, a Cash for Clunkers provision was added last week to a $106 billion bill to fund the wars in Iraq and Afghanistan. The idea was to attach a Cash for Clunkers provision to an existing bill already moving through the Senate so quick passage could be assured. Wrong.

Senators who support Cash for Clunkers need 60 votes to keep the Cash for Clunkers provision from being removed from the wartime funding bill. That could prove to be a problem.

Just hours after Sen. Judd Gregg, a New Hampshire Republican, denounced the inclusion of the cash-for-clunkers amendment as “unfunded baggage” on the war spending bill this evening, Senate Majority Leader Harry Reid delayed a vote until Thursday.

“It passes on new debt. Why would we do that?” Gregg asked in a floor speech. He said he would challenge the measure “at the appropriate time.” Senate Majority Leader Harry Reid delayed voting on the bill until Thursday.

Democrats control 58 seats in the Senate. But two — Edward Kennedy of Massachusetts and Robert Byrd of West Virginia — are ill. And Democrats led by Diane Feinstein of California have opposed the legislation as it stands, saying it does not do enough to boost fuel efficiency.

The legislation narrowly survived in the House, but for reasons mostly unrelated to the car-sales measure. Republicans were near unanimous in opposing the spending bill, objecting mostly to a provision that would boost International Monetary Fund lending.

“This bad legislation runs a con game on the American taxpayers and America’s military men and women,” said Rep. Mike Rogers, R-Brighton. He and five other Michigan Republicans voted no.

Michigan Democrat Debbie Stabenow urged quick passage of the stimulus.

“It will not help as a stimulus if it is done six months or a year from now,” she said.

If the Senate approves it, the measure will go to President Barack Obama for his signature. Then the National Highway Traffic Safety Administration will have 30 days to put regulations in place for the program which – under the war spending provision – will expire on Nov. 1.

In a related news item from across the Atlantic, Phakamisa Ndzamela writing for Reuters reported that South Korea’s Hyundai Motor Company has so far received the lion’s share of new car orders under the British government’s vehicle scrappage scheme, with sales boosted by an interest in smaller cars, according to figures obtained by Reuters.

The 300 million-pound ($491.9 million) scheme invites motorists to trade in cars more than 10 years old in return for a 2,000 pound subsidy to buy a new vehicle, in an effort to help an industry which has been severely dented by the recession.

The government earlier in the week said the scrappage scheme had resulted in 60,000 new orders in the period from April 22 to June 7.  Out of the 15 car companies in the UK that Reuters contacted, Hyundai was in pole position, stating that its latest figures, which covered the period from April 23 to June 7, amounted to 8,246 new orders

Ford came second in the number of car orders at 8,050 followed by Toyota at about 7,800 vehicles.  Following are company estimates of scrappage scheme new car orders covering the period April 22 to June 17:

• Hyundai 8,246
• Ford Motor Company 8,050
• Toyota Motor Corp 7,800
• Kia Motors UK 7,300
• Volkswagen 4,591
• Vauxhall 3,909
• Nissan 3,202
• Renault 2,600
• Peugeot 2,500
• Citroen 2,500
• Honda 2,335
• BMW and MINI 1,722
• Mazda 1,355
• Volvo 1,161
• Chevrolet 950

EETimes.com reports thatcrisis in the global automotive market is far from over. In May, the European market fell by 5 percent against the same month last year. Nevertheless, within the region, local markets developed extremely different, with Germany adding 40 percent (in terms of units) and Russia declining 57 percent. The reason for the hefty differences were the public incentives for buyers who scrapped their old car and bought a new one in some countries.  The US market has declined by 37 percent over the first five months this year. In may, sales for light vehicles declined by almost 34 percent to 923.000 units.  In contrast to other countries, the incentives in the United States will be connected to the fuel efficiency difference between old and new car.  Japan also fared weak, with sales declining 17 percent in May and 22 percent for the first five months.  the emerging markets, the crisis was far less pronounced. Brazil added 3 percent, boosted by an incentive program. India declined 1 percent in May, but over the first five months the market developed slightly positive with a plus of 2 percent. In China, the economic stimulus package and the reduction of sales tax on cars led to an increase by 55 percent in May. In that month, in China 728.000 light vehicles were sold. Thus, the Chinese market has become extremely relevant for European and Japanese car exporters. As a comparison: The entire European market (not restricted to EC countries) had a volume of 1.3 million units.

In light of all that’s reported, it seems the U.S. politicans needs to do everything to promote Automobile sales, including the passage of this Cash for Clunkers bill.  Wrangling over the details of a bill that can spur auto sales could have some severe consequences on the economy.  Will they do it?  Let’s hope so!