Cash for Clunkers: Dumbest Program Ever?

[andalusian]

gas going up to $4+ a gallon has done more for making energy efficiency "cool" than anything the government can do. If they really want to make americans value fuel efficient cars, impose a $2/gallon gas tax.

Just for the record - this article claims that the C4C has done more for sales of fuel efficient cars than we have seen even in the days of $4/gallon. Not sure how true it is - but it is interesting...

http://news.yahoo.com/s/ap/20090811/ap_on_re_us/us_clunkers_mpg

The average mileage for new vehicles rose from 21.4 miles per gallon in June to 22.1 mpg in July. That may not sound like much, but it's the highest mileage researchers at the University of Michigan have seen since the Environmental Protection Agency reconfigured mileage estimates in October 2007. It's also the biggest one-month jump.

Again, I think that the biggest benefit of this program, long-term, would be in exposing a lot of people to the issue of fuel efficiency and it's benefits. Will it happen? Who knows - time will tell, I guess.

 

[BTOWN_HUSTLA]

Just for the record - this article claims that the C4C has done more for sales of fuel efficient cars than we have seen even in the days of $4/gallon. Not sure how true it is - but it is interesting...

http://news.yahoo.com/s/ap/20090811/ap_on_re_us/us_clunkers_mpg



Again, I think that the biggest benefit of this program, long-term, would be in exposing a lot of people to the issue of fuel efficiency and it's benefits. Will it happen? Who knows - time will tell, I guess.

sure, if you only take a one or two month window during a program in which the government paid for people to buy more fuel efficient cars. however, the Toyota prius mania was at its peak when gas was $4-5 a gallon...this is when hybrids went from mere novel toys into mainstream and popular options for cars. not because of "cash for clunkers" because the market already existed. like i said, it was an artificial (or imaginary) demand because the government was supplementing and "creating" a demand due to a credit. once you remove that demand, it will return to the status quo and demand for fuel efficient cars will hinge more on gas prices than anything else.

 

[andalusian]

sure, if you only take a one or two month window during a program in which the government paid for people to buy more fuel efficient cars. however, the Toyota prius mania was at its peak when gas was $4-5 a gallon...this is when hybrids went from mere novel toys into mainstream and popular options for cars. not because of "cash for clunkers" because the market already existed. like i said, it was an artificial (or imaginary) demand because the government was supplementing and "creating" a demand due to a credit. once you remove that demand, it will return to the status quo and demand for fuel efficient cars will hinge more on gas prices than anything else.

The article shows that this is the highest fuel efficiency jump since 2007 - well into the Prius mania.

The Prius, btw, was nothing more than a brilliant marketing thing by Toyota - it still sold a drop in the bucket and never ever came close to the best selling vehicle in this country - which has been a Ford F-150 since about the dawn of man.

Again, I agree that by itself, this program is probably nothing more than a drop in the bucket - but the place where it might be useful is by taking fuel efficiency out of the "tree-huggers" circle and making it a conversation point for the average American car buyer.

 

[BTOWN_HUSTLA]

fuel efficient cars have been past the granola stage for a while, its now mainstream and its not because of C4C which is basically just the last 2 months. again, when you artificially stimulate sales of fuel efficient cars through a government program that is non-sustainable other than a short-term run, you have to put an * on there.

 

[andalusian]

fuel efficient cars have been past the granola stage for a while, its now mainstream and its not because of C4C which is basically just the last 2 months. again, when you artificially stimulate sales of fuel efficient cars through a government program that is non-sustainable other than a short-term run, you have to put an * on there.

There is no * to put when it comes to this issue - when referring to your original argument that $4/gallon will help increase fuel efficient car sales more than this program. We had had $4/gallon for most of 2008 - and this is the highest fuel-efficient sales average since 2007 - even when average prices for gas are at $2.57 per gallon.
Again - you said:

gas going up to $4+ a gallon has done more for making energy efficiency "cool" than anything the government can do.

This data shows that it is not the case. No * needed. We, as a country, it seems, are too dumb to pay attention to the details until someone puts a nice marketing campaign around it.

At $2.5/gallon the big marketing campaign has caused more to buy fuel efficient vehicles than $4/gallon did.

It's a pretty sad statement, actually, as it seems that the majority of this country is living in a financial fantasy and have for quite some time...

 

[BTOWN_HUSTLA]

There is no * to put when it comes to this issue - when referring to your original argument that $4/gallon will help increase fuel efficient car sales more than this program. We had had $4/gallon for most of 2008 - and this is the highest fuel-efficient sales average since 2007 - even when average prices for gas are at $2.57 per gallon.
Again - you said:



This data shows that it is not the case. No * needed. We, as a country, it seems, are too dumb to pay attention to the details until someone puts a nice marketing campaign around it.

At $2.5/gallon the big marketing campaign has caused more to buy fuel efficient vehicles than $4/gallon did.

It's a pretty sad statement, actually, as it seems that the majority of this country is living in a financial fantasy and have for quite some time...

Yes, a * is needed. The reason being is that there was an unsustainable government program to skew car sales towards lower mileage vehicles. they were manipulating the market, therefore it is not an accurate reflection of the consumer mindset at the time.

If the government was selling 100mpg cars at one cent for one month, and they sold 20 million cars in one month, would you say that is a trend or is that an anomaly? Its the same thing as C4C but on a more extreme scale.

The data is faulty because there are non-uniform external factors influencing the market.

 

[Denny Crane]

There is no * to put when it comes to this issue - when referring to your original argument that $4/gallon will help increase fuel efficient car sales more than this program. We had had $4/gallon for most of 2008 - and this is the highest fuel-efficient sales average since 2007 - even when average prices for gas are at $2.57 per gallon.
Again - you said:



This data shows that it is not the case. No * needed. We, as a country, it seems, are too dumb to pay attention to the details until someone puts a nice marketing campaign around it.

At $2.5/gallon the big marketing campaign has caused more to buy fuel efficient vehicles than $4/gallon did.

It's a pretty sad statement, actually, as it seems that the majority of this country is living in a financial fantasy and have for quite some time...

FWIW

Everything I've seen and read says that Toyota basically sold far more Prius' than they ever expected and probably sold all they could manufacture. The demand was so high for them when I got mine in 2005 that you basically had to accept whatever color they had, whatever options they had, and you were put on a waiting list to get one.

 

[andalusian]

Yes, a * is needed. The reason being is that there was an unsustainable government program to skew car sales towards lower mileage vehicles. they were manipulating the market, therefore it is not an accurate reflection of the consumer mindset at the time.

If the government was selling 100mpg cars at one cent for one month, and they sold 20 million cars in one month, would you say that is a trend or is that an anomaly? Its the same thing as C4C but on a more extreme scale.

The data is faulty because there are non-uniform external factors influencing the market.

No, you are losing sight of the conversation. You say it is unsustainable - and I agree. You also say that $4/gallon would do better to make fuel efficiency important to people than this program - and the data simply does not support this claim.

These are two different claims - one I agree with, the other is not supported by data. Nothing more, nothing less.

 

[andalusian]

FWIW

Everything I've seen and read says that Toyota basically sold far more Prius' than they ever expected and probably sold all they could manufacture. The demand was so high for them when I got mine in 2005 that you basically had to accept whatever color they had, whatever options they had, and you were put on a waiting list to get one.

I am not surprised. But again, the numbers are nowhere near where the most popular cars or vehicles in this country are - so while they underestimated the number of people attuned to efficiency/environment/whatever - they still did not sell enough to really make a difference in the grand scheme of things for the average American.

If there is a saving grace for the C4C program - is that it made energy efficiency a conversation piece for just about anyone buying a new car - where it was not even close to it before.

 

[Denny Crane]

I am not surprised. But again, the numbers are nowhere near where the most popular cars or vehicles in this country are - so while they underestimated the number of people attuned to efficiency/environment/whatever - they still did not sell enough to really make a difference in the grand scheme of things for the average American.

If there is a saving grace for the C4C program - is that it made energy efficiency a conversation piece for just about anyone buying a new car - where it was not even close to it before.

It speaks to $4 gas driving demand, surely.

I don't at all think this was the dumbest program ever. The govt. has many dumber, too numerous to count.

This one wasn't a winner in any sense. People didn't spend the money on US made cars, they spent them on Hondas (Honda had a strong marketing campaign, $4500 off plus $4500 from the govt.). The economics of it was a net loss. The govt. strung out the auto dealers, putting them in a cash crunch in the worst of times. And the administration pulled the plug on it before 2/3 of the money was committed.

 

[barfo]

People didn't spend the money on US made cars, they spent them on Hondas (Honda had a strong marketing campaign, $4500 off plus $4500 from the govt.).

Hondas are US made - the Accord 60%, the Civic 70%. Or so sayeth this link.

barfo

 

[Denny Crane]

The honda car forum says all the profits go to Japan (go Obama!) and most of the parts come from there, too.
http://www.hondacarforum.com/honda-...cord-most-american-made-car-what-i-heard.html

 

[barfo]

The honda car forum says all the profits go to Japan (go Obama!)

Well, honda is a japanese company, so it makes sense that the profits go there, no? Not sure what Obama has to do with that, Honda has been a Japanese company since before Obama was born.
I suppose nothing prevents Americans from buying stock in Honda, and I suppose some do.

and most of the parts come from there, too.

Well, that directly contradicts the link I provided, which was quoting part content percentages. But I don't care enough to look to see if your link is more or less believable than mine.

barfo

 

[Denny Crane]

Well, honda is a japanese company, so it makes sense that the profits go there, no? Not sure what Obama has to do with that, Honda has been a Japanese company since before Obama was born.
I suppose nothing prevents Americans from buying stock in Honda, and I suppose some do.



Well, that directly contradicts the link I provided, which was quoting part content percentages. But I don't care enough to look to see if your link is more or less believable than mine.

barfo

If there was $4500 profit per car for Honda, the entire amount came from the puny % of the stimulus package that was this program.

 

[barfo]

If there was $4500 profit per car for Honda, the entire amount came from the puny % of the stimulus package that was this program.

Well, Honda says it will make a 55 billion yen profit this year. I don't know how many vehicles they plan to sell, but they sold 1.4 million last year. Assuming they sell 1.2 million this year, then their profit per vehicle (and I realize Honda makes all sorts of stuff, so this isn't an accurate calculation) would be about $450.

barfo

 

[Denny Crane]

If treehugger.com says so, it must be true.

Honda & Toyota Making About $3,100 in Profits Per Hybrid

http://www.treehugger.com/files/2009/04/honda-toyota-making-profits-on-hybrid-cars-insight-prius.php

 

[barfo]

If treehugger.com says so, it must be true.

Honda & Toyota Making About $3,100 in Profits Per Hybrid

http://www.treehugger.com/files/2009/04/honda-toyota-making-profits-on-hybrid-cars-insight-prius.php

Well, with a name like treehugger.com, I'm certainly inclined to take their word on faith, but I suspect in this case they were using pre-crash profit figures. When the car companies started selling less, profits went down. In fact Honda is the only Japanese car company that will be profitable at all this year.

barfo

 

[Denny Crane]

Well, with a name like treehugger.com, I'm certainly inclined to take their word on faith, but I suspect in this case they were using pre-crash profit figures. When the car companies started selling less, profits went down. In fact Honda is the only Japanese car company that will be profitable at all this year.

barfo

You're not factoring in their other businesses, as you said.

GM had GMAC. A finance company. A really big one. GM had troubles more because of the financial meltdown than anything else.

 

[PapaG]

You're not factoring in their other businesses, as you said.

GM had GMAC. A finance company. A really big one. GM had troubles more because of the financial meltdown than anything else.

I'd argue that their UAW pension/furlough/layoff obligations to union members were also a major factor.

 

[barfo]

You're not factoring in their other businesses, as you said.

GM had GMAC. A finance company. A really big one. GM had troubles more because of the financial meltdown than anything else.

Well, we were talking about honda, i thought. As far as I know the lawn mower business has not tanked. But maybe it has.

barfo

 

[Denny Crane]

Well, we were talking about honda, i thought. As far as I know the lawn mower business has not tanked. But maybe it has.

barfo

Or the motorcycle business. Or airplanes or generators or financing.

 

[yakbladder]

I'd argue that their UAW pension/furlough/layoff obligations to union members were also a major factor.

Agreed.

 

[barfo]

Or the motorcycle business. Or airplanes or generators or financing.

Motorcycles have presumably fallen off. Airplanes I don't think are a big part of Honda's revenue. Generator sales are probably way up from the "got to stock up on ammo" people. Not clear to me how much financing Honda does or doesn't do.

barfo

 

[Denny Crane]

http://world.honda.com/news/2009/c090729Financial-Summary/

Consolidated Unit Sales Forecast
Fiscal year ending
March 31, 2010 - units - Difference (% change)
Motorcycles - 8.950 million units - (-11.5)
Automobiles - 3.295 million units - (-6.3)
Power Products - 4.355 million units - (-16.0)

 

[barfo]

http://world.honda.com/news/2009/c090729Financial-Summary/

Consolidated Unit Sales Forecast
Fiscal year ending
March 31, 2010 Difference
(% change) Motorcycles 8.950 million units (-11.5) Automobiles 3.295 million units (-6.3) Power Products 4.355 million units (-16.0)

Interesting. So, I guess people are putting off buying that generator. They'll be sorry when Obama shuts off their electricity.

Edit: since you've got 3.3 million cars in there, I guess the 1.4 million I quoted must have been only US sales. My bad. However, that just makes the profit per car that much lower.

barfo

 

[Denny Crane]

Looks like they sell more motorcycles than cars and generators combined.

 

[barfo]

Looks like they sell more motorcycles than cars and generators combined.

Yeah, that doesn't surprise me given the asian market, it's very bike-heavy.

barfo

 

[Denny Crane]

From the link you posted is another link to the top 10 most american made cars. 2 of the 10 are not big sellers for Toyota, the third is one by Honda.

 

[andalusian]

Yeah, that doesn't surprise me given the asian market, it's very bike-heavy.

Don't they still make and sell tons of 50cc cubs? That's probably a big part of their volume.

Profits on these can't be too much...

 

[BTOWN_HUSTLA]

No, you are losing sight of the conversation. You say it is unsustainable - and I agree. You also say that $4/gallon would do better to make fuel efficiency important to people than this program - and the data simply does not support this claim.

These are two different claims - one I agree with, the other is not supported by data. Nothing more, nothing less.

there is no data.