Four of Top ‘Clunkers’ Model Purchases Are Foreign
Aug. 4 Four of the top five models sold so far under the U.S. “cash for clunkers” program, aimed at boosting the auto industry, are made by foreign automakers, according to Transportation Department data.
Ford Motor Co.’s Focus was the top seller, followed by Toyota Motor Corp.’s Corolla, Honda Motor Co.’s Civic and Toyota’s Prius and Camry, data from the department showed today.
Initial clunkers legislation sponsored by Representative Betty Sutton, an Ohio Democrat, would have barred discounts for new vehicles manufactured overseas and offered higher payments for cars and trucks produced in the U.S. than for those made in Canada and Mexico. The “Buy American” provision was dropped from the final legislation because of opposition from foreign automakers and free-trade advocates who said it would conflict with U.S. obligations to the World Trade Organization.
“The share of cars sold to date under this program is actually larger than the traditional market share” for the U.S. automakers, White House Press Secretary Robert Gibbs told reporters today. Providing tax incentives only for U.S. companies “would have caused some legal and trade problems,” he said.
Senate Majority Leader Harry Reid, a Nevada Democrat, said today that the Senate will approve a measure this week adding $2 billion to keep the clunkers program going through this month. The government’s Car Allowance Rebate System provides credits of as much as $4,500 for the purchase of a new, more fuel-efficient vehicle when turning in an older car or truck to be junked.
“We’ll pass cash for clunkers before we leave here,” Reid told reporters after Senate Democrats had lunch with President Barack Obama, who supports extending the government payments. Reid said there are at least 60 votes in the Senate to pass the measure.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, concurred, telling reporters, “We will get a vote on the proposal sometime before the end of the week.”
A burst of demand exhausted most of the program’s initial $1 billion in less than a week. Lawmakers had expected the $1 billion to generate about 250,000 vehicle sales and last until about Nov. 1.
The House voted 316-109 on July 31 for an emergency measure that would add $2 billion to keep the program in operation.
Vehicles made by the three largest U.S. automakers -- General Motors Co., Ford and Chrysler Group LLC -- were fewer than half of sales under the program through Aug. 1, according to Transportation Department data obtained yesterday. The companies accounted for 47 percent of the clunkers transactions.
Civics From Indiana
The data didn’t break out where the cars sold were manufactured. Some vehicles sold by foreign companies are manufactured in the U.S.
“A lot of these cars are made in America by American workers in plants that are right here in America,” Transportation Secretary Ray LaHood said today in an interview on Bloomberg Television.
Honda’s Civic is built in Greensburg, Indiana, and Alliston, Ontario. Those plants make more than 95 percent of the Civics for North America.
Automakers from outside the U.S. dominate the rankings of the most fuel-efficient vehicles, those that are easiest to qualify for discounts under the clunkers program, according to data on the Energy Department’s fuel-economy Web site.
Toyota’s Prius gets the best mileage, with 48 miles per gallon in the city and 45 on the highway, according to the Web site. Foreign automakers hold the top two fuel-efficiency ratings in the site’s categories for mini-compact cars, subcompacts, compacts, midsize models, large cars and station wagons.
Pontiac’s Solstice and Saturn’s Sky, both made by General Motors, are tied for second in the two-seater category, the only other vehicle segment ranked on the site. Daimler AG’s Smart mini-car coupe and convertible share the top spot in that category.
Michigan dealers have reported $34.4 million in clunkers deals, making the state where GM, Ford and Chrysler have their headquarters the top by dollar value so far, according to the Transportation Department data today. California was second with $26.4 million.
Public Citizen, a Washington-based consumer advocacy group, called for the agency to release more information about the cars traded in and purchased under the program.
‘Access to the Details’
“The public should have access to the details of the program so it can assess whether taxpayer money is being spent well and whether the program is truly helping curb auto emissions,” Public Citizen policy analyst Lena Pons said today in a statement. “If the program is as successful as the administration claims, then releasing the information should only strengthen its case.”
As of today, the Transportation Department had received about 157,000 dealer applications for funds totaling $664 million, as the agency works through a backlog that reached hundreds of thousands of online submissions, LaHood told reporters.
Prospects that more funds would be blocked in the Senate faded today, as senators who oppose the program were non- committal when asked whether they would to try to prevent a roll call.
“I don’t know how we are going to block it” because of the “stampede to get out” for the Senate’s monthlong August recess,” Senator Richard Shelby, an Alabama Republican, told reporters.
The House has begun its August recess, and the Senate is scheduled to do so after this week.
Energy Department Money
The legislation would transfer the money from an Energy Department loan guarantee program in the economic stimulus package approved in February.
LaHood, a former Republican House member from Illinois, said he is prepared to call senators to ask for their votes and predicted approval.
“My confidence is based on this: this is a very popular program that allows people to buy a car,” LaHood said. “I think the last thing any politician wants to do is cut off an opportunity.”
LINK:Four of Top ?Clunkers? Model Purchases Are Foreign (Update3) - Bloomberg.com