The falloff in the sales rate this month after the cash-for-clunkers program may be less than expected, an industry analyst says.
About 14 to 22 percent of the 690,000 cash-for-clunkers deals submitted to the government did not appear in July or August light-vehicle sales totals, said Jeff Schuster, an analyst with J.D. Power and Associates. That means about 100,000 to 150,000 cash-for-clunkers units may pad September sales, he said in an interview yesterday.
“The payback may be softened by the fact that there may be some transactions lingering out there,” he said. “The data that we have captured is suggesting that everything is not in there.”
The data J.D. Power gathers and analyzes from new-vehicle purchases indicate some of the 690,000 cash-for-clunkers purchases may have been for ordered vehicles that had not arrived at dealerships, Schuster said. Some dealerships also may not have completed all their transactions. If so, those sales will be counted in September, he said.
Still, 100,000 vehicles would account for only about 10 percent of the 962,200 vehicles sold in September 2008. The sales rate that month was 12.5 million units. Analysts are predicting demand this month will fall to between 9 million and 10.5 million.
That's about the same as June's 9.5 million sales rate -- which was average for the first half of the year, when demand was stuck at 27-year lows.
The cash-for-clunkers program officially launched July 24, paying consumers up to $4,500 to trade in their vehicles for new ones with better fuel efficiency.
July demand hit 11.1 million and August's 13.7 million, the highest level in a year. Last month's sales increased 1 percent from 2008 levels, ending 21 months of year-over-year declines.
Analysts said August's demand without cash-for-clunkers purchases would have been 9 million to about 10.7 million.
In a research note today, JPMorgan analyst Himanshu Patel cited Ford Motor Co. analysts who said about 90,000 “clunkers-type vehicles” are scrapped each month, resulting in new vehicle sales. If the Ford estimate is true, the government program directly stimulated an annualized 4.6 million units of demand and 410,000 cash-for-clunker sales in August, Patel wrote.
General Motors Co. executives said the government program pulled demand from used-vehicle sales, so that cash for clunkers directly stimulated only 200,000 new-vehicle purchases, Patel said.
GM officials also said they thought low sales rates after cash for clunkers ended accounted for 100,000 units of the 300,000 pull-ahead sales the government program stimulated. The rest will show up in coming months, they said.
Jamie LaReau contributed to this report