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Home > Car Makers News > Other > Keeping up sales after 'clunkers' | detnews.com | The Detroit News


Keeping up sales after 'clunkers' | detnews.com | The Detroit News


Now that the "cash for clunkers" program is over, the big question is whether American consumers will slump back into unconsciousness as the adrenaline jolt of the government incentive wears off.

Last month the annualized U.S. sales rate topped 13 million units, as buyers flocked to showrooms to take advantage of up to $4,500 in discounts under the program. That sales rate looks pretty impressive considering it had dipped to below 10 million earlier this year.

The problem is that the auto industry had grown used to 16 million or 17 million consumers buying new vehicles every year, so any significant drop in demand will continue to cause problems.

And now that the program is behind us, many wonder if car buyers will tighten their grip on their checkbooks again.

The signs from Europe do not bode well. Sales there have been boosted by trade-in incentives -- the German government is spending twice as much as the U.S. administration, for example -- but now that the cash is running out, automakers fear buyers will evaporate.

Europeans less choosy

So what is it going to take to keep American consumers interested?

Part of the rationale for the clunkers program was to remove fuel-thirsty vehicles from the road. According to the U.S. government, close to 700,000 older models were traded in and scrapped. The most frequently traded-in vehicles were Ford Explorers and F-150s, Jeep Grand Cherokees and Dodge minivans.

That counts as a decent start, but the federal program only applied to vehicles less than 25 years old and had other finicky restrictions.

European programs were not so choosy.

So what about a program to address the more serious offenders from the early 1980s and even the '70s that are still on U.S. roads?

These vehicles are not only serious gas guzzlers but are likely to be safety hazards to their owners and other drivers. The average fuel economy of vehicles traded in was 16 miles per gallon. It's fair to suggest that older clunkers would be even thirstier, partly because they are likely to be very poorly maintained.

What's more, the purpose of getting older vehicles off the road is not just to reduce the nation's overall fuel consumption but to clean up the air as well. Exhaust emissions from vehicles 20 or 30 years old are far, far worse (even assuming they are tuned properly) than today's vehicles.

So perhaps the government incentive focus going forward should shift from simply improving the average fuel economy to removing the worst polluters. Instead of cash for clunkers, we could have "cash for stinkers."

Targeting real clunkers

As it was, many vehicles traded in under the program were not clunkers in the traditional sense of the word. And it could be argued that scrapping perfectly serviceable used SUVs was a step backwards; it removed an option for people looking to step up from much older vehicles.

Clearly it's important to sustain the momentum established by the clunkers program and to give consumers fresh reasons to visit showrooms -- whether it's by taking the real clunkers off the road, or by helping the sale of the coming generation of super-frugal but expensive electric cars.



[source]


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