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Discussion Starter #1
August 12th, 2009

According to the U.S. Department of Transportation, new Calibers on dealer lots are getting tough to find. In fact, of the “Cash for Clunkers” program’s top-selling vehicles, only the Toyota Prius is in shorter supply.

As of July 31, there was just a 17-day supply of Calibers in inventory and dealers are concerned they may lose deals because the Car Allowance Rebate System’s current rules require them to supply the vehicle identification number and manufacturer’s certificate of origin (MCO) with each claim filed. The MCO is typically not available until the new vehicle is delivered to the dealer. The There are also fears the program may run out of funds before new vehicle shipments can be received.

For this reason, dealers are asking the government to modify the rules to allow dealers to claim vehicles that have been ordered to replenish stock. The DOT is studying the idea, trying to come up with a workable solution that allows timely payments for dealers while protecting the program from fraud.

LINK:http://www.allpar.com/news/index.php/2009/08/calibers-in-short-supply
 

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Japanese automakers object changing 'clunkers'

Japanese automakers question changing 'clunkers'
Aug 12


WASHINGTON – Japanese automakers objected Wednesday to a request from lawmakers to change the $3 billion "cash-for-clunkers" program to allow consumers to get vouchers even if a car isn't in stock at dealerships.

Toyota Motor Corp. said it opposed the proposal from Michigan Republican Reps. Candice Miller and Fred Upton, saying it would "create considerable confusion for consumers and dealers that is not warranted."

Honda Motor Co. said it questioned whether changes to the popular incentives were needed and the president of a trade group representing Toyota, Honda and 11 other foreign manufacturers said changing the car rebate midstream would create more complications.

"It's another whole level of complexity in a very complex program already," said Mike Stanton, president and chief executive of the Association of International Automobile Manufacturers.

Congress approved a $2 billion extension to the car rebate program last week, a move that could let consumers take advantage of the vouchers of up to $4,500 until Labor Day. Through early Wednesday, $1.32 billion had been spent on the program, leading to the sale of 316,189 new vehicles.

Miller and Upton wrote Transportation Secretary Ray LaHood earlier this week asking that consumers be allowed to receive vouchers from the manufacturers for vehicles that have yet to arrive at dealerships. The current rules require the vehicles to be at dealerships to qualify.

The lawmakers said the clunkers program has led to a scarcity of certain fuel-efficient vehicles, and reduced production levels have made it difficult for car companies to replenish their inventories. "The inventories of some auto makers and dealers have been so depleted that the program's extension may be limited in its effectiveness," Miller and Upton wrote.

The Transportation Department has been reviewing the lawmakers' request. Domestic automakers, meanwhile, have been more open to the potential changes.

Chrysler said in a statement Wednesday that because of declining inventories, "a consumer currently may have to settle for less than their first choice to lock in the benefits of the CARS program." Chrysler said it continues to "look for ways to ensure the consumer can obtain the vehicle of their choice."

General Motors Co. spokesman Greg Martin said "a voucher idea might be worth a closer look" as vehicle inventory levels dwindle. Ford Motor Co. spokesman Mike Moran said the automaker had worked hard ensure adequate vehicle supply at dealerships but would support the measure if it would "help consumers get the vehicles they want."

LINK:Japanese automakers question changing 'clunkers' - Yahoo! News
 

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DOT okays vehicles on order for rebates
August 13th, 2009

Reacting to shortages caused by the popularity of the Car Allowance Rebate System (CARS), the Department of Transportation has approved rule changes that would allow vehicles in production but not yet delivered to qualify to the program.

Dealers would still need the Vehicle Identification Number to file a claim. As the VIN is assigned late in the production process, only vehicles already ordered would qualify under the expanded rules.

“The Department of Transportation is trying to make sure that everyone who wants to can participate in this wildly successful program,” said Transportation Secretary Ray LaHood. “Allowing consumers to order vehicles and qualify for the rebate will expand buyers’ choices and keep production lines running.”

Claims under the Cash for Clunkers program have already exceeded $1.42 billion, nearly half of the total funds allotted to run the program through Labor Day. The original program allocated $1 billion to run through the end of October, but results after the first week showed the funding would be woefully insufficient. Before leaving for its month-long break, Congress added another $2 billion to the coffers. Despite Republican doubts, more then 330,000 vehicles have been sold under the program.

Automakers are ramping up production of eligible vehicles. Chrysler has scheduled overtime for three weekends at its Warren Truck Assembly Plant.

LINK:http://www.allpar.com/news/index.php/2009/08/dot-okays-vehicles-on-order-for-rebates
 

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'Clunkers' rules ease as sales soar

Friday, August 14, 2009
'Clunkers' rules ease as sales soar

Purchases won't be limited to vehicles only in dealers' lots; change may relieve shortages




The Obama administration agreed Thursday to expand the "cash for clunkers" program to vehicles already in the production pipeline.

Car buyers had been limited to fuel-efficient vehicles in showrooms and on lots, and some dealers reported shortages. The Transportation Department's decision to broaden it came just days after a request by Michigan lawmakers who said it would increase consumers' choices and encourage more to take advantage of the incentive program, which already has spurred a dramatic increase in vehicle sales.

Some foreign automakers had opposed the expansion, saying it would create "confusion" among dealers and consumers.

Ford Motor Co. announced Thursday that it is boosting production at a number of factories to keep up with the demand.

The company said it saw no signs of abating interest in the program, and warned that the $3 billion Congress allocated for it would likely be exhausted in about three weeks. That was before the government announced the expansion, meaning the "cash for clunkers" program could run dry even sooner.

"The Department of Transportation is trying to make sure that everyone who wants to can participate in this wildly successful program," said Transportation Secretary Ray LaHood. "Allowing consumers to order vehicles and qualify for the rebate will expand buyers' choices and keep production lines running."

Two of Michigan's Republican members of Congress, Reps. Fred Upton of St. Joseph and Candice Miller of Harrison Township, urged LaHood to allow customers to order vehicles and not be limited to those on the lots.

"This change is necessary because many dealers have begun to run out of the most popular cars due to the incredible success of this program," Miller said Thursday. "We weren't asking for money."

Not all automakers like the change. Mike Stanton, chief executive of the Association of International Automobile Manufacturers, which represents foreign carmakers, said the change could open the door to fraud.

About 340,000 vehicles have been purchased under the program, with about 20,000 new sales submitted each day this week. Between June 22 and Tuesday, nearly 13 million hits had been registered at a government Web site detailing the program.

The program, officially known as the Car Allowance Rebate System, gives consumers vouchers for up to $4,500 for turning in vehicles of up to 25 years old and with a fuel efficiency of 18 miles per gallon or fewer, and buying more fuel-efficient models.

Congress originally allocated $1 billion for the program, but added $2 billion after unexpectedly strong demand threatened to burn through that in the first week. As of Thursday morning, $1.42 billion in voucher requests had been submitted.

Ford's chief economist, Ellen Hughes-Cromwick, expects between 700,000 and 750,000 vehicles to be sold before the program runs out of money. She estimated that between 30 percent and 40 percent of those represent sales over and above what would have occurred without incentives.

"This is exactly what fiscal stimulus is supposed to do," she said. "This has been well beyond anyone's expectations."

GM vice president of sales, service and marketing, Mark LaNeve, agreed the clunkers program had boosted industry sales 30 percent to 40 percent, if "you count increased sales from the interest and traffic, not just clunkers."

Ford said it is boosting third-quarter production in North America for the second time, adding another 10,000 units to meet increased demand for its vehicles. It plans to produce 495,000 cars and trucks -- 18 percent more than a year ago.

It also is increasing production targets for the fourth quarter to 570,000 vehicles -- a 33 percent increase over the same period last year and 15,000 units more than the company had planned to manufacture.

"Under the 'cash for clunkers' program, the Ford Escape and Focus are flying off dealer lots," said Ford Americas President Mark Fields. "We're doing all we can to ensure our dealers are well stocked with the fuel-efficient vehicles that customers really want."

To do that, Ford is increasing overtime at its Wayne Assembly Plant, which produces the Focus, and its Kansas City Assembly Plant in Claycomo, Mo., which manufactures the Escape. Later this year, it plans to boost output at its Twin Cities Assembly Plant in St. Paul, Minn., which makes the Ranger compact pickup.

Chrysler Group LLC said Thursday that nearly all of its factories will be working overtime in the next month, too.

Ford and Toyota Motor Corp. have been the biggest beneficiaries of the "cash for clunkers" program to date, with Ford, Lincoln and Mercury products accounting for 16 percent of the total sold.

Ford suggested the broader economy could benefit from more investment in the program.

On Thursday, Germany and France reported that their recessions have ended; analysts give their vehicle scrappage programs much of the credit.

LINK: 'Clunkers' rules ease as sales soar | detnews.com | The Detroit News
 

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‘Clunker’ sales borrow from 2010 market

‘Clunker’ sales borrow from 2010 market

Posted Monday, Aug 17, 2009, 1:10 pm in Employee News

The unexpected success of the U.S. government’s “cash for clunkers” program is boosting sales dramatically, but is probably pulling forward some purchases that would have taken place next year, The Detroit News reported.

Forecasting firm IHS Global Insight has increased its U.S. auto sales estimate for this year because of the robust response to the government-funded plan, the paper said. But it is paring its 2010 forecast, the News said.

George Magliano, director of North American auto industry research at IHS, said the annualized selling rate this month has spiked above 12 million cars and light trucks, after languishing below 10 million for most of the year, the paper said. Although Magliano expects the selling pace to fall back after the funds for the incentives run out, IHS has raised its full-year sales forecast to 10.3 million light vehicles from 9.8 million previously, the story said. (The Detroit News)
 
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