Duh. After fleecing the taxpayers of $3 billion in the form
of "Cash for Clunkers," the auto industry has woken up to ugly
reality: the program likely accelerated rather than
increased sales. After the bout of binge drinking comes the
hangover.
Reports the Washington Post:
Many auto industry analysts and dealers expect sales volumes to
fall now that the program is over. They worry that many people
who took advantage of the program were merely accelerating
purchases they would have made later in the year.
If that's true, the premature sales could hurt automakers,
which increased production in the third quarter to replenish
clunker-depleted inventories that had already grown low because
of factory shutdowns over the summer.
Because there's a lag time between production and getting a
vehicle to a dealership, the new vehicles "will hit when
there's a lower demand," said Jeff Schuster, executive director
of forecasting at the auto industry research firm J.D. Power
and associates.
"There might not be as many people to buy because they bought
during the clunker program," he said. "And if at the same time
there's less of an incentive program from carmakers, you could
have fewer people buying. That could stall the recovery we're
in."
Jeremy Anwyl, chief executive of Edmunds.com, another
automotive research group, agreed.
" 'Cash for Clunkers' created a nice little blip," he said.
"We'll look back and say, 'Nice party, but the hangover is
awful.' "
Suckers!
About the Author
Doug Bandow is a Senior Fellow at the Cato Institute and the Senior Fellow in International Religious Persecution at the Institute on Religion and Public Policy. A former Special Assistant to President Ronald Reagan, he is author of Beyond Good Intentions: A Biblical View of Politics (Crossway).
