There's nothing about the Cash for Clunkers program that's going to come easy, apparently.
First, the program was so successful that the government ran out of money to give to people to buy new fuel-efficient cars. The Senate, after days of negotiations, has come up with another $2 billion.
Now there's a shortage of cars.
"Everything's gone," Jerry Haas, the sales manager at Sugarloaf Ford in Winona told me this afternoon when I asked him about the odds of getting a Ford Focus, the second-most-popular car in the Cash for Clunkers program. "We have none and there are no Focuses at any dealer within 100 miles of me."
Haas said one reason for the problem is the "poor timing" of the programming, coming at the end of a model year when dealers were trying to get rid of the older models and the new models haven't arrived at showrooms yet.
"We're trying to move (customers) into other units, but we're all sold out in the first wave of the program. If they allotted more money, we don't have enough cars to sell," he said.
Ford, maker of the Focus had only a 25-day nationwide supply of cars. And only one plant in the world makes them.
"Car production is not something that you can snap your fingers and all of the sudden all the components and materials show up on your loading dock from your suppliers," George Pipas of Ford said.
Toyota says it still has a decent supply of Corollas, at 37 days, according to the Associated Press. But there are shortages of the Prius gas-electric hybrid,
with a 13-day supply.
"It's frustrating," Haas acknowledged. He also can't sell the cars in anticipation that Ford will deliver it later. "Without an MSRP sticker (manufacturer's suggested retail price), I can't sell the car."
This sounds like a success story to me. Three or four months ago we were concerned that dealers would go under because they were stuck with expensive inventory. All that back log caused the car makers to close plants for longer periods than usual. Now, at least the inventory is moving. But that's what a consumer subsidy is supposed to do. Right?
Depends on when the expiration of the program ends up being. It doesn't make a lot of sense ramping up car production, I suppose, if the demand created by the program disappears when the program does.
Then the companies are right back where they were, parking lots full of cars nobody wants to buy.
A shortage of cars, of course, also tends to create a shortage of dealers willing to bargain.
2010 Priuses are in short supply, too, based on my car hunting. However, there were still new 2009s (which qualify, as do new 2008s) on lots when I looked in early July.
The idea is to clear out the backlog, sort of a grand reset for the car industry. Guess it's working, or will trickle down to less popular models soon.
I would imagine that there's a shortage only of certain (efficient) cars. Compared to the Focus, how many people qualify for a Crown Vic?
I gotta agree with JackU.. this is better then the alternative, lots of cars still on the lots... now the dealers will order more cars, Ford will add another shift at a factory, or workers will work overtime for a bit, more parts will be ordered, etc.. how is this a bad thing? What would you be reporting on if the CARS thing was happening and the lots were still full?
Do they even make crown vics any more? My grandpa had one of those, I loved it.. I don't know what Ford's "Big" car is nowadays, they had that 500 car, but they don't make it any more..
Yikes. Quite a backlash merely for telling you what the situation is.
If the lots were still full, what would I be reporting on? I'd probably be telling you that a sales manager at a dealership says the lot is still full.
But here's the thing: If the cars aren't available, why do we need to throw ANOTHER $2 billion at the program?
If a dealer can't sell a car he doesn't have, and if the program expires without having a car on the lot, and the demand is created by the program and (apparently) only by the program, what is the longevity of the worker called back to work?
These aren't insignificant questions.
//Do they even make crown vics any more?
Isn't that what the police use?
Wikipedia says the Crown Vic name is reserved for "fleet cars" (corporate, government, taxi, and cops). Sister-landyacht Grand Marquis is still available.
"If the cars aren't available, why do we need to throw ANOTHER $2 billion at the program?"
Great question. Speaking of which, I don't think we've yet gotten an answer on whether we're getting a good ROI on the $4500 / car that the program costs.
loosely related tangent: is the opening of three additional lines at MNTAC (minntac?) indicative of a pickup in manufacturing?
Bob, for context's sake, I'd note than only two of the top 10 cars sold under CARS are facing supply shortfalls. So there appears to be plenty of opportunity left, just not the 2nd & 4th choices.
Right. I'm pulling for the Chevy Cobalt, the successor to my beloved Chevy Cavalier, which gets 37 mpg on the highway and might be the most uncomfortable car to get in an out of for anyone more than 200 pounds and more than 6 feet tall.
Fortunately, I am neither.
I was reading an interesting article about the # of cars that were sold, and that the chevy cobalt was actually #8 if you count the cars by the make and model, rather then counting all the different types of engines and stuff as different cars... for example the government report counted the escape hybird and the regular escape as different cars, the the awd and the fwd as different cars. So if you add all the escapes that were sold they were actually higher then everything else..