Clunker Program’s Sales Bubble Has Burst
DETROIT - The auto industry staggered through September, suffering from a massive cash-for-clunkers hangover that left sales down 41% compared with clunker-fueled August. Total light-vehicle sales fell to 745,997 in September after topping 1 million in August, automakers reported Thursday. September's sales were down 23% compared with September 2008, when some automakers then mistakenly declared sales had fallen as low as they would go and would rebound. "I've been in the auto business for 39 years, and I've never seen a roller-coaster year like this," says Ken Czubay, Ford's vice president of marketing, sales and service. "But so far this year, the third quarter has been the high point of the year." September's decline didn't come as a surprise, since automakers expected a falloff following the hugely successful cash-for-clunkers federal rebates. Carmakers already were looking ahead to October. General Motors, Toyota and Ford have big marketing plans in place to get customers back into showrooms and kick off sales in the fourth quarter. Even if sales don't pick up markedly, year-over-year comparisons should start to look better. Last October marked the start of the collapse in auto sales for the whole industry and put Chrysler and General Motors on the road to bankruptcy court. "The fourth quarter looks brighter, and our year-over-year comparisons should look more favorable," says Mark LaNeve, GM's sales chief. GM's September sales were down 45%. While the rest of the six biggest makers - Chrysler, Honda, Toyota, Nissan and Ford - all suffered September declines, there were some bright spots for some smaller makers. Among them were South Korean automakers Hyundai, which was up 27%, and Kia, which was up 24.4%. Cash for clunkers boosted July and August sales as consumers clamored to trade in older vehicles for up to $4,500 in government rebates. About 700,000 vehicles were sold through the program. The clunkers buying spree depleted dealer inventory for many popular, fuel-efficient cars. So even people who wanted to buy in September may have had a hard time finding cars they wanted. Thus, says Jessica Caldwell, an analyst for Edmunds.com, judging ongoing consumer appetite for cars is hard to do based on September sales. The month started off quiet, grew a bit stronger and ended weak. "I think October will be pretty paramount, in terms of where we're going to for the fourth quarter," she says. "That's going to show us where demand is now that the clunker program is over."Hyundai U.S. market share rose for the ninth-consecutive month. The compact Elantra and Santa Fe SUV were up 104% and 49%, respectively. The upscale Genesis sedan and coupe were up 61.8% for the month and up 458% year-to-date. Subaru Up all year while the industry fell, it posted a 1% September gain with strong sales of new Outback and Legacy models, up 63% and 24%, respectively. "This has been a breakout year for us," says Tim Colbeck, senior vice president of sales.Toyota The redesigned 2010 Prius hybrid is selling strong, despite lower gas prices. There's just a 7.7-day supply on lots. "Today's consumer understands that the price of gas, sooner or later, is going to go up," says Don Esmond, head of U.S. operations.Ford The new F-150 pickup posted its second monthly sales rise in a row, a sign small businesses may be feeling healthy enough to buy new equipment. F-Series sales were up 3.5%, and could go up more in October as Ford piles on rebates.