Transportation | August 05, 2009 |
'Cash for Clunkers' Has Honda Humming
By all accounts the cash for clunkers incentive program has exceeded all expectations in both volume of sales, as well as answering skeptics by getting fuel inefficient vehicles off the road. The new vehicles being purchased average nearly 10 mpg higher, saving nearly 4 million barrels of oil per year and eliminating the production of tons of greenhouse gases.
More importantly, the program and its surrounding attention seems to have driven consumers towards hybrids and fuel efficient vehicles even more than a 50 cent spike in the price of gasoline. According to Brian Benstock ,the VP and GM of Paragon Honda and Acura, the program is also introducing new customers to imports. Benstock said the program has reversed the ratio of domestic/import trade-ins at his dealership. Previously about 70 percent of his customers were trading one import (mostly Hondas) for another. Now it's the opposite: 70 percent of people walking in the door are swapping American made autos for Hondas.
The simple reason for this switch -- no Hondas qualify as clunkers under the program, so customers now Benstock's talking to customers who previously bought American SUVs and pickups. He said the Honda Civic (37 percent of sales) is the hottest seller, followed by the Accord, and then the Insight hybrid. Paragon ran out of Civic Hybrids a few weeks ago, so for now his sales people are putting people in standard Civics by touting its fuel efficiency and adding incentives. He expects to have more Civic Hybrids by the end of the month.
Sales overall are nearly back to "pre-recession" levels Benstock says, with just as many additional customers who aren't getting the cash-back as who are. He admits that this stimulus has "done exactly what it was supposed to do -- stimulate sales," but that at some point auto makers have to take over in generating sales on their own.
Ford and GM have also seen a strong increase in sales, while the impact at Chrysler has been more modes.
The Senate will likely push through another $2 billion to extend funding for the program. Benstock says the "right" vehicles are being driven off the road through the program. Most of the vehicles are older SUVs, minivans and trucks. "They're junk."
American consumers have proven that with the right incentives -- monetary in nature -- they're willing to buy more fuel efficient vehicles. The lesson for automakers (especially Detroit) is that with Congress and gas prices leading the way, the shift to fuel efficiency will continue.
John Gartner is Editor in Chief of Matter Network and an Industry Analyst for Pike Research
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Comments By Readers
These cars really needed to come off of the road (most of them were in God awful condition). They were not safe for their owners nor were they safe for the rest of us that use the roadways. The gas savings for most of these customers is in the 60%-80% range; this is good for their wallet and our environment.
:)
Too many compliments too little space, takhns!
the civic is faster and a fuennr car obviosuly its no dragster. but still. anyways its very reliable and idk if u have been in an 06-11 Civic, but the windsehild is effin huge i mean i have a ridicolous amount of visibility. so i wouldnt say thats any sort of advantage,, ur right the fit will prob fit in tighter spaces, but the civic is no pig either, and can fit in many of the same plpaces idk where u heard that about the mainteance.. i had always heard they were both cheap, but i will give u my real life xp my girl drives an 07 toyota solara to replace one headlight bulb, the dealer wanted to charge $380, she got it done for $250(btw these bulbs last about 3 yrs). to replace her tailight bulbs, we had to break the clips that hold the carpet in the trunk(well tried not breaking them, but kinda inevitable) the plastic undercarrigae pieces on her car constantly get ripped out, and the clips to fix it add up quick. her batterys died alreadyI drive an 08 Civic Sito replace my headlights, the dealership wants like $50 a piece. i bought the bulbs and did it for $30, for both bulbs! to replace my tail light bulbs, it cost me $8 for 2, and my clips unscrewed so u didnt have ot break them. my undercarrigae has never ripped out. my battery is still chugging, and i know i put more strain on my batt then she does hers!i know the headlights/tailights is kind of an odd thing to bring up, but really the toyota headlights were stupid exspensive.(they are bright though) and as far as the clips holding the carpet for changnig the tail lights. i just wanted to point it out. toyotas clips are made to be broken when they are taken out.(they dont remove easy) the dealer has bukus of these clips, so they just replace them if they do the work for u but then again u get overcharged at dealerships anyways, but in my honda, the clips screw out. which makes it alot more conviant as far as doing mainteance ur self and saiving a few dollars.idk just in my personal xp, between the 2 cars i mentioned.. not only has the honda been more reliable, but doing the mainteance myself is easier/cheaper, and idk itws just designed better like idk it seems like honda was thinking about the customers convienace when designing the car, but toyota was tinking about how to rape u on mainteance charges they just sqeeuze every penny they can from u. plus my car is SOOOO much more fun to drive then hers is even though my civics a 4 banger and her toyotas a 6 bangeridk best of luck, the fit is a good car, but my vote still goes for the Civic,
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