Blog Posts by Lonnie Miller

For all practical purposes, the U.S. government's Cash for Clunkers program is over. While dealers in the states are trying to submit their paperwork into a log-jammed government computer system, you and I are now closed off from seeing an alluring incentive of $3,500 - $4,500. And that means some dealerships are expecting the dust bunnies and tumbleweeds to return to their showrooms and auto lots.

From a success point of view, I think the CARS program was good kick in the tail for auto sales since it: (a) drove traffic into the showrooms, which gave current and future sales opportunities to a dealer, (b) it got rid of inventory unlike anything most dealers have seen (and it triggered production with a few plants for some automakers!), and (c) it pumped money into the cash register (once the government reimburses each dealer for the vouchers). Yes, some people who were going to buy later only bought earlier. But I'd argue that in the business climate right now, spending money sooner rather than later is good to rebuild confidence in the market's view of hopeful progress.

So is the party over in the dealer showroom? For now. Give it 30 days and the clearance sales for the 2009 models are going to kick in aggressively. As of today, the hoards hoping to cash in on an old vehicle are gone. But Fall is right around the corner in North America. And that typically means a slew of new models will hit the showrooms. Even if people are window shopping, traffic for dealers is good. For now, you just can't pay enough for potential car business.

Posted by Lonnie Miller, Director of Industry Analysis, Polk (08.26.2009)