Cash for Clunkers boosts July auto sales

August 3, 2009 6:45:19 PM PDT
Bay Area auto dealers are bogged down with paperwork, but beaming with the brisk sales cash for clunkers created for them.

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Dealers along Capitol Expressway Auto Mall worked until 2:00 a.m. Saturday and Sunday night to finish up cash for clunkers paperwork. Now it's a waiting game to see if there will be a second wave.

A row of traded-in clunkers and empty parking spaces once filled with new cars are signs of success.

Sunnyvale Ford sold 50 cars over the weekend, 80 percent of them under the cash for clunkers program.

But now there's a new worry -- little or no inventory with Ford plants shut down unable to restock dealerships.

"We're very worried about it actually, got about a 45-day supply. Normally, we'd like to have about 60," said Sunnyvale Ford sales manager Barry Johnson.

At Normandin Chrysler-Jeep in San Jose, every high mileage Chrysler Sebring and Jeep Patriot and Liberty are sold out. Eight of them were snapped up by cash for clunkers buyers.

"People are ready to go out and spend some money and get the economy going again. You just have the right incentive like the government put up, and it shows that the consumer is ready to jump behind it and get back in the market," said Mark Normandin from Normandin Chrysler-Jeep.

A quarter million cars sold with the help of the government's $1 billion incentive plan -- 47 percent bought domestic brands and 53 percent were imports.

California figures aren't available yet, but it's expected that imports outsold domestics.

Hyundai says 22 percent of its July sales were cash for clunkers, pushing its sales ahead of Chrysler and Nissan.

"The car industry is the backbone of the country, and if it goes up, I can assure you the economy goes up. But we need this keep going," said Abby Manteghi from Sunnyvale Hyundai.

A car wrecker is warning, though, that crushing the clunkers will shrink the supply of used vehicles.

"I believe myself that the used car prices are going to go up. My business will suffer, I believe, down the road. I'm going to get a short burst in the arm, but I cannot sell the motors and the drive trains out of these things so they're basically destroying the hearts and lungs," said Eddie Chiles from Action Auto Wreckers.

Keep in mind that this past weekend's flurry of deals will be reflected in August car sales. The Transportation Department says the typical car buyer will also save between $700 and $1,000 a year that they would have spent in fuel.

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