Congress’ paring down of the Cash for Clunkers legislation
and the expected one-month delay in its launch will cost the industry “dearly,” said CNW Research.
As of Tuesday, the $1 billion Cash for Clunkers legislation
was awaiting President Obama’s signature after gaining approval by Congress
last Thursday. In anticipation of the legislation’s signing, the federal
government launched a Website (www.cars.gov)
on Monday, which provides information on how the process is expected to work
and urges consumers to contact dealers to see if they will register for the
program.
Originally slated at $4 billion and one million vehicles,
the program is now expected to put $3,500 to $4,500 in the pockets of about
250,000 owners of older, gas-guzzling vehicles. And if the program is launched
by July, those vehicle owners will have until November to take advantage of the
program, which CNW says just isn’t long enough.
In its May issue of Retail
Automotive Summary, CNW said the bulk of support and the probable use of
the program was among people who had to replace their current vehicle by June
and July. And with the program not expected to launch until the end of June, only
about 252,000 of those surveyed by CNW said they were “strongly interested.”
“In a representative sample of potential users conducted in
early June, and using the latest version of the C4C (Cash for Clunkers)
legislation that puts a three-month time limit on the plan, the maximum
addition to new-vehicle sales has slipped from 1.2 million to less than half a
million,” wrote CNW’s Art Spinella in his monthly newsletter. “Again, this is
the maximum.”
Additionally, roughly half of those who say they could wait
for the program enactment said they wouldn’t be ready to buy until the first
quarter of 2010.
“While auto dealers and automakers would like to see C4C
expanded and extended to a full year, the data shows distribution of those sales
will be regionalized and in large part going to Asian automakers,” wrote
Spinella. “The environmental impact will be miniscule considering the number of
vehicles actually being replaced. But a billion dollars doesn’t go as far as it
once did.”
