On July 1, Congress's ballyhooed "Car Allowance Rebate System" program opened for business. After taking more than three weeks more before auto dealers like AutoNation
Americans hate Ford
As U.S. News & World Report reported Tuesday morning, preliminary figures from the Cash for Clunkers program showed that these vehicles were the ones that Americans most often clunked for cash:
1. 1998 Ford Explorer
2. 1997 Ford Explorer
3. 1996 Ford Explorer
4. 1999 Ford Explorer
5. Jeep Grand Cherokee
6. Jeep Cherokee
7. 1995 Ford Explorer
8. 1994 Ford Explorer
9. 1997 Ford Windstar
10. 1999 Dodge Caravan
On the flip side, these are the new cars that were bought most often under the program, according to the preliminary figures:
1. Ford Focus
2. Honda Civic
3. Toyota Corolla
4. Toyota Prius
5. Ford Escape
6. Toyota Camry
7. Dodge Caliber
8. Hyundai Elantra
9. Honda Fit
10. Chevy Cobalt
Now new figures are coming in all the time, so these rankings could easily change. But it certainly appears that given their druthers, American buyers are most eager to unload light trucks -- specifically, 10-to-15-year-old Ford
Americans love Ford
Perhaps the most surprising bit of trivia extracted from the data, though, are the twin facts that:
- Ford's Focus sedan tops our national wish list; and
- Ford's Escape small SUV is the only SUV in the top 10 cars we're buying.
Bullish news for Ford fans indeed. But from where I sit, Ford shareholders may be so busy cheering: "We're No. 1!" that they're missing the best news of all. Read through those two lists again, and the obvious conclusion is that American car buyers are a whole lot smarter than the car salesmen give us credit for.
Question: How many clowns can you fit in a Prius?
Given the opportunity to soak the government for $3,500 or $4,500, depending on how much of a gas-mileage bump we get when trading in an old car for a new, it looks like we're electing to take $4,500 whenever possible. And again, whenever possible, people have been snapping up fuel-efficient sedans, and unloading fuel-inefficient SUVs quick, trying to get in before the money runs out.
Answer: Not as many as fit in an Escalade
But the key point here is "whenever possible." You see, there's more than just low miles-per-gallon separating an SUV from a sedan. There's also cargo capacity (for both humans and hardware.) Simply put, you can stuff more circus clowns into an SUV than into a subcompact.
And that's good news for Ford -- and GM, and Dodge.
You see, historically, "incentive" programs like this have had a sort of robbing-Peter-to-pay-Paul effect on the auto market. They pull sales into this year that would otherwise have occurred in later years -- because a car sold today is by definition a car that you cannot sell tomorrow. I guarantee you that the plummeting car sales we've seen over the past year wouldn't have been (quite) as bad as they were, had GM and its Detroit brethren not swiped future car sales with Employee Pricing for Everyone, his Brother Ned, and the Family Cat.
The big risk in Cash for Clunkers is that it will have a similar effect on car sales in 2010 and beyond. But here's the thing ...
The statistics reveal that Cash for Clunkers is disproportionately "robbing Peter" of future small car sales. As in, not SUV and pickup sales. And who sells a lot of small cars in the U.S. these days? That's right: Japanese automakers.
Call me crazy. Call me a Fool. But my guess is that as future quarterly reports roll around, we're going to see Detroit automakers' light truck sales hold up better than Japan's small car sales post-Cash-for-Clunkers. Because American families have always needed and always will need a certain number of high clown-capacity vehicles in the driveway. And you can fit only so many clowns in a Prius.
Foolish final thought
This doesn't fit neatly within the "car sales" theme of today's column, but something else about the program caught my eye. Although some big components, such as engines, must be destroyed, other parts, including tires, can be recycled or resold. In a nation reeling from the Recession, where saving money and pinching pennies is back in vogue, I'll give you three guesses what a sudden influx of used tires on the market is going to do to sales and profits at Goodyear Tire & Rubber
What kinds of cars won't be hurt a bit by Cash for Clunkers?
The kinds that aren't on the market yet: e-cars. Read all about 'em in: