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8/12/09
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Cash for Clunker program drives auto sales
Just as most of their brethren across the country, local auto dealers have seen in recent weeks something that’s been rare for two years — customers. And not just tire-kickers. Motivated by the federal government’s “Cash for Clunkers” trade-in program to retire older, fuel-swilling cars and trucks, most dealers in Folsom and up the hill saw a kick in sales. “Off the hook,” enthused Bill Kennedy, new car sales manager for Ford and general sales manager for Kia vehicles at Folsom Lake Ford and Folsom Lake Kia. “It’s a big thing for customers. We’re back in the car business.” It’s not just smaller economy cars that are moving out of his stores. “People are buying everything,” he said. “Escapes (Ford’s small SUV), Focuses, Fusions, everything. Kias are doing well. Larger SUVs like Expositions aren’t selling. We haven’t sold one in a long time.” Overall, the dealership by late last week had sold more than 75 cars since the Clunkers program launched in late July. From July 24 through the first week in August, Folsom Lake Honda, opened since the end of March, posted a 30 percent increase in sales, compared with the number of autos moved in May, June and most of July. “It’s incredible,” said Don Palombi, general manager. “Unbelievable.” “We didn’t know what to expect, maybe anything from a 20 percent pop. There’s a buzz out there that something different is happening,” he said. “There’s more of a positive feeling about the economy out there.” The Civic compact “far and away” has been the dealership’s number-one seller, with the smaller Fit second, followed by the CRV small SUV. The big question is whether the sales, driven by the Cash for Clunkers program, will continue. “How much pent-up demand is really out there?” asks Palombi. “In California we’ve been dealing with a downturn in the economy for three years, longer than anybody else. You know how hard the housing bubble popped here.” Meanwhile, enthusiasm filtered up the hill to Shingle Springs Honda where sales manager David Wardlaugh said the clunkers deal had an impact, “upping our business quite a bit. We have a lot of people coming in. Things were slow before the program kicked in but we’re still selling ‘em.” The dealership took in 25 clunkers in the first two weeks. That’s helped the company clean out “aged” units and old inventory, according to Wardlaugh. “All Hondas are fuel economic,” he said, reporting the hottest sellers have been Civics, Accords and the CRV SUV. Bryant McCarver, general sales manager at Shingle Springs Nissan and Subaru, calls the program “a fairly smashing success.” At mid-last week, the store had taken in nearly 60 clunkers, about the same as the number of sales made each month “so it’s given us an additional 60 on top of our normal businesses,” he said. “It’s definitely doubled our business.” He expects a consumer pullback when the program ends, estimated to be when the final $2 billion funding expires by Labor Day. The rebates of $3,500 to $4,500 for trade-ins of vehicles with low fuel economy, if the buyer selects a more efficient replacement, is a “sizeable incentive for cars that could literally be worth nothing,” McCarver said. “There’s definitely going to be a pullback. It’s just a matter of how severe it is.” At Folsom Chevrolet-Geo, 18 cars were sold off the program in late July, pushing total new car sales into the 40s, about the same as July last year, when the economy was healthier. “It increased our sales of new cars easily,” said Tom Conway, fleet/commercial manager. “We’ve had a good turnout and it’s helped our business quite a bit. About 90 percent of our clunker sales were economy cars, Cobalts, Aveos HHRs,” Conway said.
Keywords
cash for clunkers
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