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Top Stories
Clunkers Program Yields 690,114 Deals for $2.88 Billion
For Car Dealers, Cash for Clunkers Rescues Summer
Dealers Hope for Payment as Clunkers Program Ends
Dealer Inventories, Cash Low as Clunker Program Ends
Auto Makers Rethink Luxury Lines
GM to Remove Its Logo from Vehicles
Top Stories
Clunkers Program Yields 690,114 Deals for $2.88 Billion

WASHINGTON -- Dealers submitted a total of 690,114 cash-for-clunkers deals for $2.88 billion in rebates by last night's 8 p.m. deadline, coming in under the $3 billion budget for the popular program, the U.S. Transportation Department said today. The potential cost of the four-week program precludes for now the need for the Obama administration to ask Congress for more money. But the figures do not include dealer reapplications that might be submitted after deadline, Transportation spokeswoman Jill Zuckman said. “We gave you the total figure of applications submitted, period,” she said in an e-mail to Automotive News. Transportation Secretary Ray LaHood said last week that rejected filings could be resubmitted after the claims deadline. The National Automobile Dealers Association has estimated that the rejection rate was as high as 80 percent at one time, though department officials later said that rate had been “dramatically” reduced. Transportation plans to add to the public and private staff that already includes 2,000 employees who are processing dealer applications for rebates, the statement said.
Source: Automotive News

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For Car Dealers, Cash for Clunkers Rescues Summer

The government's Cash for Clunkers program has rescued many auto dealerships from an otherwise moribund summer, creating what one dealer calls "a whole buying atmosphere." "More people are buying, so it seems like the thing to do," says John Guido Jr., the general sales manager at Arlington Heights Ford. At his dealership in the Chicago suburbs, the program has nearly doubled the number of potential buyers coming into the showroom on an average Saturday. The sales boom has even extended beyond the cars sold directly through the government-sponsored incentive program, which offers up to $4,500 for trading in older, gas-guzzling vehicles. "There appears to be significant trickle-down effects for dealers from the Cash for Clunkers program," says Paul Taylor, the chief economist for NADA... "The program has increased traffic even from those who don't qualify." Guido says several potential buyers have brought in cars that are just outside the program's gas mileage restriction of 18 miles per gallon or worse. But these days, many dealers are able to offer better trade-in deals because used car prices are rising. "There's a shortage of used cars," Taylor says. "If you're selling 6.5 million fewer new cars, you've got over 4 million fewer trades coming in, because 60 percent of new car deals usually involve trades."
Source: NPR

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Dealers Hope for Payment as Clunkers Program Ends

WASHINGTON -- The wildly successful $3 billion Cash for Clunkers program has generated more than half a million car sales. Now dealers hope to get paid. With hundreds of thousands of consumers having driven off in new fuel-efficient vehicles since the program began in late July, many car dealers worry about further delays in getting repaid... Chuck Eddy, a Chrysler dealer in Youngstown, Ohio, completed more than 100 Clunker deals in late July and August and wrapped up his final deal on Saturday afternoon. He considers the program a "true, true stimulus" but said he's still owed $390,000. "I still haven't been paid my first dollar," Eddy said. "That just makes you a little nervous." Some members of Congress have urged the administration to speed up the payment process. "It is up to the U.S. Department of Transportation to respond to the applications submitted by our auto dealers in a fair and timely manner," said Rep. Tim Walz, D-Minn. The National Automobile Dealers Association recommended that dealers e-mail claims to the clunkers Web site, CARS.gov, to create a back-up paper record in case they couldn't get their deals in on time through the online submission process.
Source: The Associated Press

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Dealer Inventories, Cash Low as Clunker Program Ends

FORT WORTH -- Auto dealer Cliff Johnson sold 70 vehicles under the government's "cash-for-clunkers" program, which offered rebates of up to $4,500 to trade in older gas guzzlers. But the day after the program ended he's only been paid for two and he's worried about how quickly the government will reimburse him over a quarter of a million dollars and whether it will pay fully. "They owe us $279,000, that's the bottom line. We did 70 deals and we've been paid on two," said Johnson, president of Texas Motors Ford. "My people have been paid, my sales people have been paid ... and all I'm left with is a piece of paper from the federal government saying that it is under review," he said as he waved a folder with the details of the deals. Transportation Secretary Ray LaHood assured dealers last week they would be paid. "I know dealers are frustrated. They're going to get their money," he said. But this shot in the arm has left some dealers anxious about cash flow at a time when inventories are low -- in part because of the program's success. Chuck Eddy, an owner of Bob and Chuck Eddy Chrysler-Dodge-Jeep in Youngstown, Ohio, said on Monday he had not received payment on any of nearly 100 "clunker" deals he had completed, but was confident he would be reimbursed. "They are going to pay us," Eddy said. "They never anticipated, nor did they understand what goes on inside a dealership."
Source: Reuters

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Auto Makers Rethink Luxury Lines

Sales of luxury cars, once considered resistant to recessions, fell almost 21% last year -- double the decline in overall car sales -- and continue to slide this year. That raises a disturbing question for auto makers: Is it merely a reaction to the downturn, or a long-term change in consumer behavior? Car companies aren't taking chances. Some are preparing smaller, cheaper versions of their high-end nameplates. Others are tweaking their messages, emphasizing "sustainability" and fuel economy in a market segment that for years competed on who had the highest horsepower and richest leather. The recession is the main reason for the decline. But another factor is the growing desire by some consumers to cut carbon emissions, which has given fuel-efficiency a new cachet, car makers say.
Source: The Wall Street Journal

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GM to Remove Its Logo from Vehicles

DETROIT -- General Motors Co. will begin removing its "Mark of Excellence" logo from vehicles as the company places greater emphasis on its individual brands. GM spokesman Terry Rhadigan said Tuesday the company would phase out the placement of the GM logo on its cars and trucks, leaving just the GMC, Chevrolet, Cadillac or Buick logos on the vehicles. "We really want to elevate the prominence of our four core brands," he said. "It's really going to be an intense focus." The final decision to remove the silver square logo was made earlier this month, although executives had mentioned the possibility of such a move months ago. The company found that consumers had a greater affinity for GM's individual brands than the corporate name.
Source: The Associated Press

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Quotable
 
"... they are expecting that President Obama will follow through on his word when he said that dealers would be paid." 

    -- Alex Kurkin, an attorney of Kurkin Brandes, LLP, who represents the Florida Automobile Dealers Association, referring to "cash for clunkers" reimbursement delays, Reuters, Aug. 25


"I know dealers are frustrated. They're going to get their money."

   
-- Transportation Secretary Ray LaHood assured dealers last week they would be paid for "clunkers" deals, Reuters, Aug. 25


"It is imperative that dealers not be penalized by loss of reimbursement for legitimate program sales for reasons outside their control, such as inability to access the Department of Transportation website."

   
-- NADA Chairman John McEleney on the final days of the "clunkers" program, BNET Autos, Aug. 25


"I've got some dealers who need to figure out where they're going to go for interim financing. From the standpoint of sales and production, this program was an absolute success. From an administrative perspective, it was an absolute nightmare."

   
-- Drew Campbell, president of the New Car Dealers Association of Metropolitan Dallas, on dealers waiting to be reimbursed for "clunkers" deals, The Dallas Morning News, Aug. 25


"We haven't had discussions to that effect. I'll never say never. Whether or not it should be refueled is a question for another day."

   
-- U.S. Rep. Betty Sutton, D-Ohio, a chief sponsor of "clunkers" legislation, on whether the program will be renewed, Reuters, Aug. 25


"It's the best program we all hate."

   
-- Chuck Eddy, a Chrysler dealer in Youngstown, Ohio, who completed more than 100 "clunkers" deals in late July and August, considers the program a "true stimulus" but says he's still owed $390,000, The Associated Press, Aug. 25

Video Highlights
 

Keep or Scrap Cash for Clunkers? 
(CNBC)


Dealers, Detroit Look for Boost From 'Clunkers' (PBS)



Helping Dealers Left Out of New GM (Fox Business)



Media Coverage: The Tragedy of Dealer Closings (NADA-TV)



NADA's New Buy Now Campaign



No Dent in Demand for Some U.S. Cars (NBC)



Cutting Dealers a Mistake (Fox Business)



NADA on Floorplan Credit Crisis (NADA-TV)


John McEleney's Testimony to Senate Committee (CNBC)
 Senate Testimony on Floorplan Loans (NADA-TV)
 Banks Turning on American Car Dealers? (WTNH-TV)
 NADA Tackles Industry Crisis (NADA-TV)
 McEleney Speaks at NADA Convention (NADA-TV)
 Demise of Dealerships Leaves Big Dent (NBC)
NADA on the Front Lines  (NADA-TV)


Click here for more video reports.

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