GM: 'Clunkers' Did Its Part
Updated from Tuesday, Sept. 1
DETROIT (
) --
Ford
(SYMBOL)
and
General Motors
both say September sales will suffer due to Cash for Clunkers sales, but the impact should wind down by October.
Industry watchers have been debating whether the program, which helped to fund 690,000 vehicle sales by providing $3 billion in incentives, would be followed by a "payback" for pulling ahead buyers who would have bought new cars later on.
But by and large, the program was "pulling people in from (buying) used cars," said Mike DiGiovanni, GM sales analyst, on the company's August sales call. Of the 690,000 Cash for Clunkers buyers, DiGiovanni said about 100,000 might have bought new cars in September, with "a little dribble into October," but most of the impact of the program will have dissipated by the end of October.
Ford's analysis led to the same conclusion. "We should see a decline in sales in September," said sales analyst George Pipas, on the Ford sales call. "By the time we get into the end of the month or October, it'll pretty much be behind us."
Ford economist Emily Kolinski Morris said that while the program drew some buyers who would have bought in future months, it also led to "purchases that would have taken place this year but were deferred due to the economy or anticipation of the program."
In any case, Pipas said, Ford is "more concerned about the trajectory of the economic expansion as we close out the year -- September is neither here nor there." Cash for Clunkers pushed the August seasonally adjusted annual rate of sales to about 14.5 million vehicles: Without the program, the rate would have been about 10.5 million, Morris said. GM estimates industry sales this year will end up around 10.5 million, while Ford says 10.5 million to 11 million.
Whatever the total, it will be "higher than the 9.8 million SAAR that we saw in the first six months of the year," reflecting the improving economy, Pipas said.
During August, Ford sales rose by 17%, GM sales declined by 20% and Chrysler sales fell by 15%.
GM Sales Manager Mark LaNeve said GM suffered from the comparison with August 2008, when it offered employee pricing to all buyers and when industrywide truck sales surged. Last month, GM truck sales declined by 30%, but car sales fell by only 4.6%. Overall Chevrolet sales declined by 9.2%, as sales of the Equinox rose 188% to 13,157 while Aveo sales rose 159% to 12,733.
LaNeve said GM was pleased by its showing in the Cash for Clunkers sales: It had about a 17.5% share compared with 19.5% for
Toyota
TICKER TYPE="EQUITY" SYMBOL="TMl" EXCHANGE="NYSE" PRIMARY="NO"/> and 14.4% for Ford. LaNeve noted that GM, like Ford, is more heavily focused on truck sales than Japanese and Korean companies, while the program focused on car sales. Chrysler's share was about 7%.
Among the top 10 vehicles sold under Cash for Clunkers, the only two produced by U.S. manufacturers were the Ford Focus and the Ford Escape. Focus sales were up 56% to 25,547. Escape sales rose 49% to 20,933. Ford said sales of pickup trucks and the new Transit Connect van also rose, an indication of economic recovery. Sales of the Ford F-Series, the country's bestselling truck, rose 13% to 45,590.
Ford shares closed Tuesday down 36 cents to $7.24, and fell a further 2 cents in after-hours trading.
-- Written by Ted Reed in Charlotte, N.C.
.
