The government soon may be handing out vouchers for new cars. Cash giveaways have spurred trade-ins in Europe. Will they help in the U.S.?
The government really wants to get the U.S. automobile industry into gear. It has already stepped in to bail out carmakers with money, loans, and special bankruptcy treatment. Now it seems ready to dole out $1 billion to consumers in the form of vouchers to buy newer, more-efficient vehicles under the Cash for Clunkers program.
Proponents say it will modernize the U.S. vehicle fleet, getting rid of older cars that pollute more, are less safe, and burn more gas. More important to many, the money could save jobs in the auto sector, from parts suppliers to dealers, by lifting new car sales by at least 250,000 this year. One sign of the measure's popularity: The Senate passed it on a 91-5 vote.
President Barack Obama had repeatedly urged Congress to pass the bill and is expected to sign it by July 1, its proposed effective date.
Clunker qualifications
Still, there are critics. Some say the eligibility requirements are too stringent for the program to have much effect. Others say the government has already spent too much to help the car industry. There are also questions about whether the folks driving those clunkers can afford brand-new wheels. "It is just too big of a price tag for the minimal results it would produce," said Senator Ben Nelson of Nebraska, the only Democrat to vote against the act.
Here are the basics:
• Vouchers of either $3,500 or $4,500 will be given to people who trade in an older vehicle to buy a new one.
• The trade-in, or clunker, must be no older than 25 years, have average gas mileage of less than 18 miles per gallon, and have been owned by the seller for at least a year.
• The new car must cost less than $45,000 and get more than 22 mpg. To get the higher voucher, the new vehicle must also average 10 more miles per gallon than the old one.
• Trucks—SUVs, pickups, and minivans—have different rules. An improvement of at least 2 mpg between the old and new vehicles qualifies for $3,500; 5 mpg or more entitles buyers to $4,500.
• There are no income limits on voucher recipients, nor restrictions on where the new cars are made.
+ "Cash for Clunkers" Law Signed by Obama
+ Cash for Clunkers Rebate Eligible Vehicles List by Edmunds
+ Cash For Clunkers Car Buying Stimulus Bill
+ BMW Used Cars Eligible for 'Cash For Clunkers'
+ Cash for Clunkers: Eligible Used Cars List Under $3,500
Germany instituted a scrappage program earlier this year, followed by France and Britain. While car sales are down significantly from prerecession 2007 totals, sales in those countries have risen since the subsidies began. There's little question that Detroit could use a similar boost. Americans are on track to buy 9.5 million new vehicles this year, down 40% from 16.1 million in 2007.
Edmunds.com CEO Jeremy Anwyl says, however, that carmakers and buyers alike will be disappointed. He argues that the industry needs help raising sales by 3 million vehicles or more, not 250,000 to 400,000. "The scale is just wrong," he says.
Anwyl urges consumers to read the fine print. The program is not a rebate or a tax credit, though, based on public comments at Edmunds.com, he says many people think so. "Don't get too excited," Anwyl says. "Chances are you're not eligible."
Showing posts with label Used Cars. Show all posts
Showing posts with label Used Cars. Show all posts
Wednesday, June 24, 2009
"Cash for Clunkers" Law Signed by Obama
A $1 billion "cash for clunkers " bill was signed into law by President Obama late Wednesday, but the specifics of the plan are still being worked out, according to the U.S. Department of Transportation. The law is designed to get consumers into more fuel-efficient vehicles.
Under the law, consumers can get up to $4,500 toward a new more fuel-efficient car when they trade in an older model with worse gas mileage, under the new system.
The formal name of the program is the Car Allowance Rebate System (CARS). "Under the CARS program, NHTSA [National Highway Traffic Safety Administration] is charged with rules for program implementation in 30 days," according to the U.S. Department of Transportation's Web site. "You may want to contact your local dealer in mid-July."
Consumers can sign up for updates as the program rolls out to car buyers and dealers. The program ends on November 1, 2009. It is designed to stimulate the auto industry and act as an environmental aid, since it is intended to encourage consumers who own an older gas guzzler to purchase or lease a new, fuel-efficient vehicle.
The National Automobile Dealers Association is telling its dealers to wait until the rules are out in July before participating.
According to the U.S. Department of Transportation, the trade-in vehicle must meet these requirements to qualify for the program:
+ Cash For Clunkers Car Buying Stimulus Bill
+ BMW Used Cars Eligible for 'Cash For Clunkers'
+ Cash for Clunkers: Eligible Used Cars List Under $3,500
The cash-for-clunkers provision was passed as part of a larger $106 billion military spending bill.
Under the law, consumers can get up to $4,500 toward a new more fuel-efficient car when they trade in an older model with worse gas mileage, under the new system.
The formal name of the program is the Car Allowance Rebate System (CARS). "Under the CARS program, NHTSA [National Highway Traffic Safety Administration] is charged with rules for program implementation in 30 days," according to the U.S. Department of Transportation's Web site. "You may want to contact your local dealer in mid-July."
Consumers can sign up for updates as the program rolls out to car buyers and dealers. The program ends on November 1, 2009. It is designed to stimulate the auto industry and act as an environmental aid, since it is intended to encourage consumers who own an older gas guzzler to purchase or lease a new, fuel-efficient vehicle.
The National Automobile Dealers Association is telling its dealers to wait until the rules are out in July before participating.
According to the U.S. Department of Transportation, the trade-in vehicle must meet these requirements to qualify for the program:
- The vehicle must be less than 25 years old on the trade-in date.
- Only the purchase or lease of a new vehicle qualifies.
- Trade-in vehicles must get 18 miles per gallon or less, although the law notes "some very large pickup trucks and cargo vans have different requirements."
- Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.
- "You don't need a voucher; dealers will apply a credit at purchase."
+ Cash For Clunkers Car Buying Stimulus Bill
+ BMW Used Cars Eligible for 'Cash For Clunkers'
+ Cash for Clunkers: Eligible Used Cars List Under $3,500
The cash-for-clunkers provision was passed as part of a larger $106 billion military spending bill.
Monday, June 22, 2009
Mercedes, BMW Used Car Sales Lead Georgia Market
Toyota Prado and Corolla are the bestselling cars in Georgia, according to one of the leading auto dealership companies Matemotors and Toyota Centre Tbilisi . Among Mercedes models ML-Class is the most popular, Mercedes Centre Tbilisi claims.
“The bestseller of the year 2008/2009 is Toyota Prado. It’s a Japanese vehicle of the highest quality for which demand is constant. Such Japanese brands as Toyota Nissan and Mitsubishi are quite popular in Georgia today also,” Irakli Zaria, General Manager of Matemotors Ltd, told The FINANCIAL.
“As the auto market grows up the population has an increasing choice of brands and models. But the Japanese brands occupy a very special niche. Among these brands Toyota is the leader in sales. The popularity of Toyota among other brands can be explained very easily: incomparable quality, refined design and acceptable prices,” Zaria says.
“The most popular and bestselling cars for the year 2008/2009 in Georgia, according to the sales of our company is the Toyota Prado and Corolla. The popularity of these brands among Georgians are due to their quality, prices and brand. From the above mentioned favourite brands our company in 2008 sold 400 Prado and 350 Corolla. In the first quarter of 2009, we sold 90 Prado and 80 Corolla,” says Tina Revazishvili, representative of Toyota Center Tbilisi .
The total number of cars sold by Toyota Centre Tbilisi in 2008 was 3,773.
After the beginning of the global recession Toyota decreased prices on cars by 15%.
“The most popular and bestselling car for the year 2008/2009 in Georgia, according to the sales of our company is the ML-Class. Of the above mentioned favourite brand among Georgians, our company sold 35 cars in 2008 and in the first quarter of 2009 - 7,” says Lasha Lomidze, Sales Manager of Mercedes-Benz Georgia.
Mercedes-Benz has imported 138 passenger cars; 30 commercial vehicles in 2008 and 21 passenger cars and 1 commercial vehicle in 2009.
“In total in 2008 we sold 125 passenger cars and 16 commercial vehicles. In 2009 we sold 14 passenger cars and 2 commercial vehicles,” Lomidze says.
After the beginning of the global recession, Mercedes-Benz Georgia has decreased prices on cars by 10-20%.
“In the US and the West car producing companies started creating the hybrid-electric vehicle, which has an additional electric engine, economizing fuel consumption. As Lomidze, Mercedes-Benz notes, in Georgia the demand for such autos has not increased.
“These cars have a great future I think, as a new combined type of engine is a great saving of money on fuel and at the same tame it’s less polluting. The only minus is that it’s less powerful, but this problem is being worked on,” Zaria declares.
“Matemotors doesn’t sell hybrid-electric vehicles yet. The reason is that the new type of engine requires special service which is not available at the moment. The second reason is demand, which is still very low. The general part of the population is not informed enough about the advantages of this new generation of cars, and for the rest the price is just not realistic. However in a few years the hybrid engines will gradually overtake petrol engines,” Zaria notes.
After the beginning of the global recession we used to have sales of up to 15-20%.
“Now we offer our customers interest-free credit allowing purchasing of a vehicle by instalments without any percent charge. The credit duration is one year,” Zaria says.
According to information on the car sales web pages auto.ge and myauto.ge, the leading car makes for second hand cars are Mercedes-Benz and BMW.
According to the information of myauto.ge, the leading top ten car brands offered for sale on our web page are as follows: Mercedes-Benz, with a total number of 2,692, BMW - 2,264, Volkswagen - 1,304, Mitsubishi - 1,169, Honda - 890, Opel - 851, Toyota - 731, Audi - 651, Nissan - 411, Subaru - 407.
“On the web pages of auto.ge the biggest number of cars offered for sale are Mercedes-Benz and BMW: C180-104, E200-59, E320-45, 220-40, E230-36, ML 320-33, 190-32, C 230-32, 230-28. BMW: 318-104, 525-80, 528-67, 520-58, 316-55, 320-49, X5-46, 523-24, 728-13,” says Zaza Dzadzamia, founder and Director General of the web page auto.ge.
“The bestseller of the year 2008/2009 is Toyota Prado. It’s a Japanese vehicle of the highest quality for which demand is constant. Such Japanese brands as Toyota Nissan and Mitsubishi are quite popular in Georgia today also,” Irakli Zaria, General Manager of Matemotors Ltd, told The FINANCIAL.
“As the auto market grows up the population has an increasing choice of brands and models. But the Japanese brands occupy a very special niche. Among these brands Toyota is the leader in sales. The popularity of Toyota among other brands can be explained very easily: incomparable quality, refined design and acceptable prices,” Zaria says.
“The most popular and bestselling cars for the year 2008/2009 in Georgia, according to the sales of our company is the Toyota Prado and Corolla. The popularity of these brands among Georgians are due to their quality, prices and brand. From the above mentioned favourite brands our company in 2008 sold 400 Prado and 350 Corolla. In the first quarter of 2009, we sold 90 Prado and 80 Corolla,” says Tina Revazishvili, representative of Toyota Center Tbilisi .
The total number of cars sold by Toyota Centre Tbilisi in 2008 was 3,773.
After the beginning of the global recession Toyota decreased prices on cars by 15%.
“The most popular and bestselling car for the year 2008/2009 in Georgia, according to the sales of our company is the ML-Class. Of the above mentioned favourite brand among Georgians, our company sold 35 cars in 2008 and in the first quarter of 2009 - 7,” says Lasha Lomidze, Sales Manager of Mercedes-Benz Georgia.
Mercedes-Benz has imported 138 passenger cars; 30 commercial vehicles in 2008 and 21 passenger cars and 1 commercial vehicle in 2009.
“In total in 2008 we sold 125 passenger cars and 16 commercial vehicles. In 2009 we sold 14 passenger cars and 2 commercial vehicles,” Lomidze says.
After the beginning of the global recession, Mercedes-Benz Georgia has decreased prices on cars by 10-20%.
“In the US and the West car producing companies started creating the hybrid-electric vehicle, which has an additional electric engine, economizing fuel consumption. As Lomidze, Mercedes-Benz notes, in Georgia the demand for such autos has not increased.
“These cars have a great future I think, as a new combined type of engine is a great saving of money on fuel and at the same tame it’s less polluting. The only minus is that it’s less powerful, but this problem is being worked on,” Zaria declares.
“Matemotors doesn’t sell hybrid-electric vehicles yet. The reason is that the new type of engine requires special service which is not available at the moment. The second reason is demand, which is still very low. The general part of the population is not informed enough about the advantages of this new generation of cars, and for the rest the price is just not realistic. However in a few years the hybrid engines will gradually overtake petrol engines,” Zaria notes.
After the beginning of the global recession we used to have sales of up to 15-20%.
“Now we offer our customers interest-free credit allowing purchasing of a vehicle by instalments without any percent charge. The credit duration is one year,” Zaria says.
According to information on the car sales web pages auto.ge and myauto.ge, the leading car makes for second hand cars are Mercedes-Benz and BMW.
According to the information of myauto.ge, the leading top ten car brands offered for sale on our web page are as follows: Mercedes-Benz, with a total number of 2,692, BMW - 2,264, Volkswagen - 1,304, Mitsubishi - 1,169, Honda - 890, Opel - 851, Toyota - 731, Audi - 651, Nissan - 411, Subaru - 407.
“On the web pages of auto.ge the biggest number of cars offered for sale are Mercedes-Benz and BMW: C180-104, E200-59, E320-45, 220-40, E230-36, ML 320-33, 190-32, C 230-32, 230-28. BMW: 318-104, 525-80, 528-67, 520-58, 316-55, 320-49, X5-46, 523-24, 728-13,” says Zaza Dzadzamia, founder and Director General of the web page auto.ge.
BMW Used Cars Eligible for 'Cash For Clunkers'
Cash for Clunkers car buyers can shop for BMW cars under the new bill’s provisions. Certain BMW cars meet the fuel efficiency requirements to be eligible for the Cash for Clunkers voucher program. Under the new bill, consumers would receive a voucher worth up to $4,500 for trading in their current clunker for a new, more fuel efficient car.
According to the official Cash for Clunkers Facts websites, the following BMW cars qualify for the Cash for Clunkers trade-in program:
• 128
• 135
• 328
• 335d
• 528
In order to qualify, total combined city and highway MPG estimates must equal 44. To see the complete list of BMW cars and their MPG estimates.
Cash for Clunkers received the green light on June 18th to be added to the war time funding bill, with an initial $1 billion reserved for the new bill. President Obama has already said he would sign the bill into law, with action expected to be completed by July.
Consumers looking for Cash for Clunkers BMW participating dealers in their state can visit: http://horisly.blogspot.com/2009/06/cash-for-clunkers-eligible-used-cars.html
* Cash For Clunkers Car Buying Stimulus Bill
* Cash for Clunkers Rebate Eligible Vehicles List by Edmunds
* Cash for Clunkers: Eligible Used Cars List Under $3,500
* 'Cash for Clunkers' Not Much Help for Sales or Environment?
* New Vehicles Tax Credit for Delawareans in 2009
* 'Cash for Clunkers' Incentives Plan Approved by House
* Cash for Clunkers Plan: How it Work - (Q & A)
* Cash-For-Clunkers: Pickup Trucks Buyer to Be Winner
* "Cash for Clunkers' Incentives Program to Buy New Car
The website also provides answers to frequently asked questions about the bill’s provisions and helps consumers determine whether or not their car would qualify for the trade-in program. The popular FAQ page is located at http://horisly.blogspot.com/2009/06/cash-for-clunkers-car-buying-stimulus.html
According to the official Cash for Clunkers Facts websites, the following BMW cars qualify for the Cash for Clunkers trade-in program:
• 128
• 135
• 328
• 335d
• 528
In order to qualify, total combined city and highway MPG estimates must equal 44. To see the complete list of BMW cars and their MPG estimates.
Cash for Clunkers received the green light on June 18th to be added to the war time funding bill, with an initial $1 billion reserved for the new bill. President Obama has already said he would sign the bill into law, with action expected to be completed by July.
Consumers looking for Cash for Clunkers BMW participating dealers in their state can visit: http://horisly.blogspot.com/2009/06/cash-for-clunkers-eligible-used-cars.html
* Cash For Clunkers Car Buying Stimulus Bill
* Cash for Clunkers Rebate Eligible Vehicles List by Edmunds
* Cash for Clunkers: Eligible Used Cars List Under $3,500
* 'Cash for Clunkers' Not Much Help for Sales or Environment?
* New Vehicles Tax Credit for Delawareans in 2009
* 'Cash for Clunkers' Incentives Plan Approved by House
* Cash for Clunkers Plan: How it Work - (Q & A)
* Cash-For-Clunkers: Pickup Trucks Buyer to Be Winner
* "Cash for Clunkers' Incentives Program to Buy New Car
The website also provides answers to frequently asked questions about the bill’s provisions and helps consumers determine whether or not their car would qualify for the trade-in program. The popular FAQ page is located at http://horisly.blogspot.com/2009/06/cash-for-clunkers-car-buying-stimulus.html
Thursday, June 18, 2009
CarMax Earning Drop 3% in Q1.2009, Used Sales Better Than New
CarMax Inc. posted a 3 percent profit decline, better than analysts expected, as sales of the used vehicles that account for most of its business fell less sharply than sales of new cars.
Earnings for the first quarter ended May 31 dropped to $28.7 million from $29.6 million a year earlier. Revenue decreased 17 percent to $1.83 billion as consumers battled the longest recession since the Great Depression.
CEO Tom Folliard said reduced waste and increased efficiency at CarMax stores helped limit the earnings decline the "in the midst of the most challenging economic and credit environments in our history."
Unit sales of used vehicles, which account for about 96 percent the company's volume in 2008, fell 12 percent. New-car demand dropped 42 percent.
CarMax ranks 26th in the Automotive News ranking of the biggest U.S. dealership groups, based on 15,485 total new vehicle sales in 2008. The company sold 377,244 used vehicles last year, ranking it as the nation's largest seller of used cars.
Earnings for the first quarter ended May 31 dropped to $28.7 million from $29.6 million a year earlier. Revenue decreased 17 percent to $1.83 billion as consumers battled the longest recession since the Great Depression.
CEO Tom Folliard said reduced waste and increased efficiency at CarMax stores helped limit the earnings decline the "in the midst of the most challenging economic and credit environments in our history."
Unit sales of used vehicles, which account for about 96 percent the company's volume in 2008, fell 12 percent. New-car demand dropped 42 percent.
CarMax ranks 26th in the Automotive News ranking of the biggest U.S. dealership groups, based on 15,485 total new vehicle sales in 2008. The company sold 377,244 used vehicles last year, ranking it as the nation's largest seller of used cars.
Tuesday, June 16, 2009
Cash for Clunkers: Eligible Used Cars List Under $3,500
As Congress debates cash-for-clunkers legislation, we reviewed our data to determine what worn out old cars make the most sense to junk and what qualifying cars we think would make better replacements—featured in another post.
The used cars we’ve listed are the newest vehicles likely to be available for less than $3,500, the minimum voucher value. For this to be worthwhile to the consumer, the vehicle’s trade-in value would need to be less than the voucher. Older versions of these vehicles are likely to be worth less, making the vouchers even more appealing. Many of the models have mechanical twins sold by another brand that may qualify, but we have not listed them here.
Keep in mind that spending money on a new car can buy you more than just improved fuel economy. A new car will have a warranty to cover repairs. And a decade (or more) of improvement in safety and reliability.
The past 10 years have brought big gains in safety engineering and technology, including better structure to cushion the impact while maintaining the integrity of the occupant space and safety features such as front-side and curtain air bags and electronic stability control (ESC). In particular, many older SUVs have a higher inherent risk of rollover than newer car-based designs with ESC.
In addition to casting the spotlight on eligible clunkers, we will soon present a list of Consumer Reports recommended vehicles that could serve as a replacement. To see a complete list of Consumer Reports recommended models check out our ratings, available to online subscribers.
(Via consumerreports.org.)
The used cars we’ve listed are the newest vehicles likely to be available for less than $3,500, the minimum voucher value. For this to be worthwhile to the consumer, the vehicle’s trade-in value would need to be less than the voucher. Older versions of these vehicles are likely to be worth less, making the vouchers even more appealing. Many of the models have mechanical twins sold by another brand that may qualify, but we have not listed them here.
Keep in mind that spending money on a new car can buy you more than just improved fuel economy. A new car will have a warranty to cover repairs. And a decade (or more) of improvement in safety and reliability.
The past 10 years have brought big gains in safety engineering and technology, including better structure to cushion the impact while maintaining the integrity of the occupant space and safety features such as front-side and curtain air bags and electronic stability control (ESC). In particular, many older SUVs have a higher inherent risk of rollover than newer car-based designs with ESC.
In addition to casting the spotlight on eligible clunkers, we will soon present a list of Consumer Reports recommended vehicles that could serve as a replacement. To see a complete list of Consumer Reports recommended models check out our ratings, available to online subscribers.
| |
| Make | Model | Older than model year | EPA combined mpg | Category |
| Cadillac | DeVille | 1994 | 17 | Car |
| Cadillac | Eldorado | 1994 | 17 | Car |
| Cadillac | Seville | 1993 | 17 | Car |
| Jaguar | XJ6 | 1996 | 18 | Car |
| Lincoln | Continental | 1999 | 18 | Car |
| Lincoln | LS V8 | 2001 | 17 | Car |
| Lincoln | Town Car | 1996 | 18 | Car |
| Mercury | Grand Marquis | 1998 | 18 | Car |
| Oldsmobile | Aurora | 1998 | 18 | Car |
| Pontiac | Firebird | 1992 | 18 | Car |
| Chevrolet | Astro | 2000 | 16 | Truck |
| Chevrolet | Blazer 2dr 4WD | 1995 | 16 | Truck |
| Chevrolet | Blazer 4dr 4WD | 1999 | 16 | Truck |
| Chevrolet | S10 4WD | 1997 | 16 | Truck |
| Chevrolet | Silverado 4WD | 1998 | 16 | Truck |
| Dodge | Dakota | 2001 | 14 | Truck |
| Dodge | Durango | 1998 | 13 | Truck |
| Dodge | Ram 4WD | 1994 | 12 | Truck |
| Dodge | Grand Caravan | 2000 | 18 | Truck |
| Ford | Aerostar | 1996 | 17 | Truck |
| Ford | F150 V8 4WD | 1995 | 14 | Truck |
| Ford | Expedition 4WD | 2000 | 17 | Truck |
| Ford | Explorer 4WD | 1999 | 15 | Truck |
| Ford | Windstar | 2001 | 18 | Truck |
| Isuzu | Rodeo 4WD | 1996 | 15 | Truck |
| Jeep | Grand Cherokee V8 | 1997 | 14 | Truck |
| Jeep | Wrangler | 1995 | 16 | Truck |
| Kia | Sedona | 2002 | 16 | Truck |
| Mitsubishi | Montero Sport 4WD | 2001 | 17 | Truck |
| Nissan | Pathfinder | 1998 | 15 | Truck |
| Nissan | Quest | 1999 | 18 | Truck |
| Toyota | 4Runner 4WD | 1992 | 13 | Truck |
(Via consumerreports.org.)
Monday, June 8, 2009
Should I Buy a New Car Now? Or Keep Clunker?
With incentives on new cars at all-time highs and dealers desperate to move inventory, it is an excellent time to buy a new car. But what if you could eke out another 50,000 miles on your old car and save a lot of cash? James, a reader from Easton, Md., recently wrote to us with just such a conundrum. He was considering trading in his 2003 Chevrolet Silverado pickup, which had 94,000 miles on the odometer, for a new, loaded Dodge Ram, even though the Chevy was paid off and in good condition. He acknowledged that he didn't really need a new truck but worried that the deals wouldn't be nearly as attractive if he waited.
Dollars and Sense.
How do the financials stack up? We asked Vincentric, an automotive-research firm, to compare the cost of several new vehicles with their five-year-old counterparts. We assumed that the used vehicles were paid off and the new vehicles were paid for with a five-year, 6.6% loan and 15% down. Based on total ownership costs over five years -- including insurance, fuel, repairs and depreciation -- the results are firmly in favor of hanging on to your old car.
For example, a new Chevrolet Malibu will cost $33,064 over five years, or $7,343 more than the $25,721 it would cost you to maintain a 2004 model that's paid off. Likewise, a new Honda CR-V has a five-year ownership cost of $33,520, versus $24,597 for the five-year-old model. That's a savings of $8,923 if you keep the old vehicle.
James was tempted by Dodge's employee-pricing promotion, plus $3,000 in rebates and a $1,000 dealer coupon, all together knocking $11,000 off the sticker price. A generous trade-in value on the Silverado and 0% financing over four years (plus assurances that the feds would back the warranty) clinched the deal, and he's now the pleased owner of a new Dodge Ram pickup. But Vincentric's numbers arenÕt encouraging.
The biggest new-vehicle expense is depreciation (in James's case, the Dodge Ram will lose $25,000 in value over five years). Maintenance and repairs are the biggest hits for older vehicles: Repair costs are typically twice as much, and maintenance can cost as much as three times more for five-year-old models.
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
+ Cash For Clunker Incentives Plan to Vote Today by Senate
+ Canadian makers,dealers ask for $3,500 incentives to scrap old clunkers
+ 'Cash for Clunkers' Incentives to Revive US Auto Sales
Factor It All In.
Spooked by worries over the economy and unemployment, more people are taking the value route -- keeping their cars longer and paying for repairs. The average length of vehicle ownership increased to four and a half years in 2008, up from four years in 2002, reports R.L. Polk, an automotive-information firm. And according to Sageworks, a private-company data provider, auto-repair shops' sales rose 2% in 2008.
What's more, a car-loan payment is a set amount, whereas holding on to your old car "provides an element of flexibility," says Philip Reed, of Edmunds.com. "Fixing up your clunker is a variable cost per month, and some repairs will be elective." The maintenance section of Edmunds.com has estimates for all service visits, so you can get an idea of typical expenses. One deal-breaker for your old car, says Reed, is a failed transmission -- which can cost up to $3,000 to rebuild or replace. Other tipping points: The vehicle has been unreliable from the get-go or it looks as if you'll be making multiple repairs every month.
Uncle Sam's incentives might also help persuade you to junk the clunker. You can write off state and local sales taxes and excise taxes on new cars, light trucks, motor homes and motorcycles bought from February 17 through the end of 2009. You claim the deduction on your 2009 tax return regardless of whether you itemize or claim the standard deduction. And as we went to press, Congress was weighing the latest version of the "cash for clunkers" bill, which would give vouchers worth up to $4,500 to buyers who trade in their old cars for new, more fuel-efficient vehicles.
Dollars and Sense.
How do the financials stack up? We asked Vincentric, an automotive-research firm, to compare the cost of several new vehicles with their five-year-old counterparts. We assumed that the used vehicles were paid off and the new vehicles were paid for with a five-year, 6.6% loan and 15% down. Based on total ownership costs over five years -- including insurance, fuel, repairs and depreciation -- the results are firmly in favor of hanging on to your old car.
For example, a new Chevrolet Malibu will cost $33,064 over five years, or $7,343 more than the $25,721 it would cost you to maintain a 2004 model that's paid off. Likewise, a new Honda CR-V has a five-year ownership cost of $33,520, versus $24,597 for the five-year-old model. That's a savings of $8,923 if you keep the old vehicle.
James was tempted by Dodge's employee-pricing promotion, plus $3,000 in rebates and a $1,000 dealer coupon, all together knocking $11,000 off the sticker price. A generous trade-in value on the Silverado and 0% financing over four years (plus assurances that the feds would back the warranty) clinched the deal, and he's now the pleased owner of a new Dodge Ram pickup. But Vincentric's numbers arenÕt encouraging.
The biggest new-vehicle expense is depreciation (in James's case, the Dodge Ram will lose $25,000 in value over five years). Maintenance and repairs are the biggest hits for older vehicles: Repair costs are typically twice as much, and maintenance can cost as much as three times more for five-year-old models.
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
+ Cash For Clunker Incentives Plan to Vote Today by Senate
+ Canadian makers,dealers ask for $3,500 incentives to scrap old clunkers
+ 'Cash for Clunkers' Incentives to Revive US Auto Sales
Factor It All In.
Spooked by worries over the economy and unemployment, more people are taking the value route -- keeping their cars longer and paying for repairs. The average length of vehicle ownership increased to four and a half years in 2008, up from four years in 2002, reports R.L. Polk, an automotive-information firm. And according to Sageworks, a private-company data provider, auto-repair shops' sales rose 2% in 2008.
What's more, a car-loan payment is a set amount, whereas holding on to your old car "provides an element of flexibility," says Philip Reed, of Edmunds.com. "Fixing up your clunker is a variable cost per month, and some repairs will be elective." The maintenance section of Edmunds.com has estimates for all service visits, so you can get an idea of typical expenses. One deal-breaker for your old car, says Reed, is a failed transmission -- which can cost up to $3,000 to rebuild or replace. Other tipping points: The vehicle has been unreliable from the get-go or it looks as if you'll be making multiple repairs every month.
Uncle Sam's incentives might also help persuade you to junk the clunker. You can write off state and local sales taxes and excise taxes on new cars, light trucks, motor homes and motorcycles bought from February 17 through the end of 2009. You claim the deduction on your 2009 tax return regardless of whether you itemize or claim the standard deduction. And as we went to press, Congress was weighing the latest version of the "cash for clunkers" bill, which would give vouchers worth up to $4,500 to buyers who trade in their old cars for new, more fuel-efficient vehicles.
Saturday, June 6, 2009
Canadian makers,dealers ask for $3,500 incentives to scrap old clunkers
Car makers and dealers are urging the federal government to pay people $3,500 to scrap old clunkers and buy new vehicles.
Representatives of the Canadian Vehicle Manufacturers' Association and the Canadian Automobile Dealers Association applauded the steps the government has taken to support the struggling auto industry, but said they'll come to naught unless consumers start buying.
If Ottawa invests $350 million - a pittance compared to the billions it has spent bailing out Chrysler and General Motors - it could stimulate sales of 100,000 new vehicles, Richard Gauthier, president of the dealers' association, said Friday at a news conference in Ottawa.
"So far government has been tremendously supportive of our industry and has helped ensure it remains viable," Gauthier said.
"However, consumer confidence has been shaken by the state of the economy, and we need to give them reason to get their older, higher-polluting vehicles off the road."
Gauthier and Mark Nantais, president of the vehicle manufacturers' association, called on Ottawa to create a scrappage program similar to those on offer in the U.K., France and Germany.
Under the proposal, the government would offer consumers a $3,500 incentive to trade in a used car that's at least 10 years old for a new one. The program would last for one year or until the funding was used up, whichever came first.
Gauthier said the program could be funded in large part by the $92 million already set aside for a smaller scrappage program and by the increase in GST revenue from increased vehicle sales. Assuming an average car price of $20,000, sales of 100,000 new vehicles would generate $100 million in GST revenue.
In addition, a robust vehicle scrappage program would also boost the struggling economy, Nantais said.
"This will kickstart the consumer confidence needed to get people into showrooms and actually purchasing new cars. We must complete the stimulus equation by addressing demand," Nantais said.
In Germany, a program that pays consumers euro2,500, or more than C$4,000, to trade in their used cars has done wonders to boost new vehicle sales, Gauthier said. New vehicle sales in Germany increased by 20 per cent in April and a whopping 40 per cent in May, largely on the strength of the scrappage program.
By comparison, Canadian sales were down by 17.8 per cent in April and 16.5 per cent in May.
Critics of scrappage programs say they simply boost vehicle sales in the short term but prompting consumers who were already planning to buy a new vehicle to head to the showroom a few months early.
Ford Canada president and CEO David Mondragon said a robust scrappage program would help offset almost a third of vehicle sales lost to the recession.
"Our industry this year is trending down close to 20 per cent right now, so that's a nearly 300,000-unit decline on a year-over-year basis," said Mondragon, who has been an outspoken proponent of an improved scrappage program.
"If we could claw back 100,000 of those units, it would hugely offset the decline and stabilize our industry," he added.
Canada does offer a scrappage program already, but critics have variously described it as "a joke" and "useless."
Under the current program, consumers can receive free transit passes, membership in a car-sharing program, money towards a new bike, $300 in cash or a $500 rebate on the purchase of vehicle built in 2004 or later.
However, the incentives vary by province. New Brunswick and Prince Edward Island are the only provinces in which you can get the rebate. If you live in Ontario, Manitoba or Saskatchewan, your only option is the $300 in cash.
Last month, Industry Minister Tony Clement said Ottawa is closely watching a similar proposal that's winding its way through U.S. Congress but doesn't want a program that will pay consumers for their old clunkers only to have them resold and go back on the road.
Representatives of the Canadian Vehicle Manufacturers' Association and the Canadian Automobile Dealers Association applauded the steps the government has taken to support the struggling auto industry, but said they'll come to naught unless consumers start buying.
If Ottawa invests $350 million - a pittance compared to the billions it has spent bailing out Chrysler and General Motors - it could stimulate sales of 100,000 new vehicles, Richard Gauthier, president of the dealers' association, said Friday at a news conference in Ottawa.
"So far government has been tremendously supportive of our industry and has helped ensure it remains viable," Gauthier said.
"However, consumer confidence has been shaken by the state of the economy, and we need to give them reason to get their older, higher-polluting vehicles off the road."
Gauthier and Mark Nantais, president of the vehicle manufacturers' association, called on Ottawa to create a scrappage program similar to those on offer in the U.K., France and Germany.
Under the proposal, the government would offer consumers a $3,500 incentive to trade in a used car that's at least 10 years old for a new one. The program would last for one year or until the funding was used up, whichever came first.
Gauthier said the program could be funded in large part by the $92 million already set aside for a smaller scrappage program and by the increase in GST revenue from increased vehicle sales. Assuming an average car price of $20,000, sales of 100,000 new vehicles would generate $100 million in GST revenue.
In addition, a robust vehicle scrappage program would also boost the struggling economy, Nantais said.
"This will kickstart the consumer confidence needed to get people into showrooms and actually purchasing new cars. We must complete the stimulus equation by addressing demand," Nantais said.
In Germany, a program that pays consumers euro2,500, or more than C$4,000, to trade in their used cars has done wonders to boost new vehicle sales, Gauthier said. New vehicle sales in Germany increased by 20 per cent in April and a whopping 40 per cent in May, largely on the strength of the scrappage program.
By comparison, Canadian sales were down by 17.8 per cent in April and 16.5 per cent in May.
Critics of scrappage programs say they simply boost vehicle sales in the short term but prompting consumers who were already planning to buy a new vehicle to head to the showroom a few months early.
Ford Canada president and CEO David Mondragon said a robust scrappage program would help offset almost a third of vehicle sales lost to the recession.
"Our industry this year is trending down close to 20 per cent right now, so that's a nearly 300,000-unit decline on a year-over-year basis," said Mondragon, who has been an outspoken proponent of an improved scrappage program.
"If we could claw back 100,000 of those units, it would hugely offset the decline and stabilize our industry," he added.
Canada does offer a scrappage program already, but critics have variously described it as "a joke" and "useless."
Under the current program, consumers can receive free transit passes, membership in a car-sharing program, money towards a new bike, $300 in cash or a $500 rebate on the purchase of vehicle built in 2004 or later.
However, the incentives vary by province. New Brunswick and Prince Edward Island are the only provinces in which you can get the rebate. If you live in Ontario, Manitoba or Saskatchewan, your only option is the $300 in cash.
Last month, Industry Minister Tony Clement said Ottawa is closely watching a similar proposal that's winding its way through U.S. Congress but doesn't want a program that will pay consumers for their old clunkers only to have them resold and go back on the road.
Thursday, June 4, 2009
'Cash for Clunkers' Incentives to Revive US Auto Sales
Auto Dealers Believe the 'Cash for Clunkers' Bill Will Help Revive U.S. Auto Sales. The nation's auto dealers, pummeled by auto sales that are the lowest in 17 years, are optimistic that the "Cash for Clunkers" bill now moving through Congress will positively impact U.S. auto sales.
However, dealers are also concerned that sales are being frozen while the bill is being debated because consumers are waiting for vouchers to become available for trade-ins before purchasing a new car.
These are the results of a national survey of U.S. auto dealers conducted this week by Dealix, a division of Cobalt, and the leading provider of new car and used car automotive sales leads for dealers and OEMs. The Senate is poised to consider a version of the bill, which will provide consumers credits of up to $4,500 if they trade in cars with low mileage per gallon for more fuel efficient vehicles.
Dealix, which counts most of the nation's auto dealers as customers, sent the survey to general managers, dealer principals, Internet managers, and other sales professionals at the majority of the nation's roughly 20,000 franchised dealerships. In their responses to the survey, dealers expressed strong hopes for the legislation:
* Over 85% said the legislation would stimulate car purchases to some degree, with over 26% of that group saying it would increase purchases "a lot."
* And, almost 60% believe the program will help the environment.
While optimistic about the impact, dealers are also concerned that, in the short-term, anticipation of the bill is decreasing sales. Nearly 60% of dealers responding indicated that some or a lot of consumers are delaying their purchases until the bill is passed.
Dealers are watching the legislative process closely, with 84% of respondents reporting a familiarity with the proposal. These dealers also had strong opinions about some of the most hotly contested elements of the competing Senate and House bills:
* More than 6 out of 10 responding dealers believe the program should apply to the purchase of a used car; not solely to new car purchases.
* The majority - over 70% - do not believe vouchers should be applied retroactively to purchases made before the bill is passed.
Dealers are anticipating that they will play a role in educating customers about the specifics of the bill. Nearly 70% are planning marketing campaigns to explain that vouchers are available and how they will be used.
"Consumers will need help from dealers to understand how to use the Cash for Clunkers program, and they'll also turn to independent sources to research their car choices," said Anna Zornosa, general manager of Dealix. "During 2008, as consumers responded to increases in gas prices by considering new fuel efficient vehicles, they turned to the Internet for help in significant numbers. We expect independent Internet research sites to play this same vital role as consumers take advantage of the vouchers."
Dealix is focused on providing dealers with the tools needed to get the most from the new program. The company has created a blog, CashforClunkers.org, which has chronicled events in the life of the legislation since early this year. Dealix will also distribute summaries of the bill and produce seminars for dealers on the details of the legislation. Dealers who want more information on the survey or the bill itself or who want to register for an upcoming webinar on the topic are encouraged to send an email with their contact information to webinars@dealix.com.
+ Cash For Clunker Incentives Plan to Vote Today by Senate
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
About Dealix
Dealix, a division of Cobalt, is the world's leading provider of quality leads for new and used cars for dealerships, dealer groups, and automotive manufacturers. Dealix has the broadest reach and the highest quality lead supply network in the industry, including Kelley Blue Book, Edmunds.com, Yahoo! Autos, AOL Autos, MSN Autos, and others. Dealix also represents Edmunds' Premier Dealer Program and powers AOL Autos' and MSN Autos' price quote platforms. Dealix connects dealers with the millions of car shoppers who prefer independent Internet sites when shopping for new cars and used cars online. Dealix's all new Lead Platform quickly matches thousands of serious new and used vehicle buyers to the most appropriate dealers daily, delivering a quality car buying experience for consumers and providing dealers with one of the most efficient methods available today for marketing and selling cars.
About Cobalt
Cobalt is North America's leading provider of digital marketing services for the automotive industry. For over fourteen years, Cobalt's mission has been to help automobile dealers and manufacturers increase their retailing effectiveness and profitability. Cobalt provides marketing services to half of the automotive dealerships in the United States, as well as automotive dealers in Canada and Mexico. Cobalt's marketing services are endorsed by approximately two-thirds of the world's major automotive manufacturers.
However, dealers are also concerned that sales are being frozen while the bill is being debated because consumers are waiting for vouchers to become available for trade-ins before purchasing a new car.
These are the results of a national survey of U.S. auto dealers conducted this week by Dealix, a division of Cobalt, and the leading provider of new car and used car automotive sales leads for dealers and OEMs. The Senate is poised to consider a version of the bill, which will provide consumers credits of up to $4,500 if they trade in cars with low mileage per gallon for more fuel efficient vehicles.
Dealix, which counts most of the nation's auto dealers as customers, sent the survey to general managers, dealer principals, Internet managers, and other sales professionals at the majority of the nation's roughly 20,000 franchised dealerships. In their responses to the survey, dealers expressed strong hopes for the legislation:
* Over 85% said the legislation would stimulate car purchases to some degree, with over 26% of that group saying it would increase purchases "a lot."
* And, almost 60% believe the program will help the environment.
While optimistic about the impact, dealers are also concerned that, in the short-term, anticipation of the bill is decreasing sales. Nearly 60% of dealers responding indicated that some or a lot of consumers are delaying their purchases until the bill is passed.
Dealers are watching the legislative process closely, with 84% of respondents reporting a familiarity with the proposal. These dealers also had strong opinions about some of the most hotly contested elements of the competing Senate and House bills:
* More than 6 out of 10 responding dealers believe the program should apply to the purchase of a used car; not solely to new car purchases.
* The majority - over 70% - do not believe vouchers should be applied retroactively to purchases made before the bill is passed.
Dealers are anticipating that they will play a role in educating customers about the specifics of the bill. Nearly 70% are planning marketing campaigns to explain that vouchers are available and how they will be used.
"Consumers will need help from dealers to understand how to use the Cash for Clunkers program, and they'll also turn to independent sources to research their car choices," said Anna Zornosa, general manager of Dealix. "During 2008, as consumers responded to increases in gas prices by considering new fuel efficient vehicles, they turned to the Internet for help in significant numbers. We expect independent Internet research sites to play this same vital role as consumers take advantage of the vouchers."
Dealix is focused on providing dealers with the tools needed to get the most from the new program. The company has created a blog, CashforClunkers.org, which has chronicled events in the life of the legislation since early this year. Dealix will also distribute summaries of the bill and produce seminars for dealers on the details of the legislation. Dealers who want more information on the survey or the bill itself or who want to register for an upcoming webinar on the topic are encouraged to send an email with their contact information to webinars@dealix.com.
+ Cash For Clunker Incentives Plan to Vote Today by Senate
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
About Dealix
Dealix, a division of Cobalt, is the world's leading provider of quality leads for new and used cars for dealerships, dealer groups, and automotive manufacturers. Dealix has the broadest reach and the highest quality lead supply network in the industry, including Kelley Blue Book, Edmunds.com, Yahoo! Autos, AOL Autos, MSN Autos, and others. Dealix also represents Edmunds' Premier Dealer Program and powers AOL Autos' and MSN Autos' price quote platforms. Dealix connects dealers with the millions of car shoppers who prefer independent Internet sites when shopping for new cars and used cars online. Dealix's all new Lead Platform quickly matches thousands of serious new and used vehicle buyers to the most appropriate dealers daily, delivering a quality car buying experience for consumers and providing dealers with one of the most efficient methods available today for marketing and selling cars.
About Cobalt
Cobalt is North America's leading provider of digital marketing services for the automotive industry. For over fourteen years, Cobalt's mission has been to help automobile dealers and manufacturers increase their retailing effectiveness and profitability. Cobalt provides marketing services to half of the automotive dealerships in the United States, as well as automotive dealers in Canada and Mexico. Cobalt's marketing services are endorsed by approximately two-thirds of the world's major automotive manufacturers.
Tuesday, June 2, 2009
Cash For Clunker Incentives Plan to Vote Today by Senate
The U.S. Senate may vote today on competing plans to boost U.S. auto sales by paying owners to crush old, inefficient models.
The plan spearheaded by Sen. Debbie Stabenow, D-Mich., has the backing of automakers, dealers and President Barack Obama. But a competing proposal from Sen. Dianne Feinstein, D-Calif., would set tougher mileage standards after complaints from environmental groups that the consensus plan won't save enough fuel.
Following another month of weak sales, and forecasts for sales of only 10 million new cars and trucks this year, automakers and their allies on Capitol Hill have pressed Congress to act quickly.
"It's critical that we pass this," Stabenow said Tuesday. "This is an opportunity to immediately stimulate auto sales across the country."
Under the Stabenow plan, owners of cars and trucks that get less than 18 m.p.g. could get a voucher of $3,500 to $4,500 for a new vehicle, depending on the mileage of the new model. The voucher would replace any trade-in value, since the old model would be scrapped.
Backers say the compromise would cost about $4 billion -- paid for with money from the economic stimulus plan passed earlier this year -- and could boost sales by 1.3 million vehicles over a year, according to industry officials.
But critics note that the plan favors owners of trucks over cars: even 15 years ago, only five models of midsize sedans managed just 18 m.p.g.
The Feinstein plan would add a $2,500 voucher, require old models to get less than 17 m.p.g., and require larger mileage improvements for the larger voucher. It would also offer a $1,000 voucher for buying efficient used models.
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
The U.S. Chamber of Commerce backed the Stabenow bill in a letter to Congress on Tuesday, saying it would offer the best mix of economic and environmental benefits.
Stabenow offered the plan as an amendment to a Senate bill setting new controls on tobacco products. It wasn't clear Tuesday evening when Feinstein might offer her plan.
The plan spearheaded by Sen. Debbie Stabenow, D-Mich., has the backing of automakers, dealers and President Barack Obama. But a competing proposal from Sen. Dianne Feinstein, D-Calif., would set tougher mileage standards after complaints from environmental groups that the consensus plan won't save enough fuel.
Following another month of weak sales, and forecasts for sales of only 10 million new cars and trucks this year, automakers and their allies on Capitol Hill have pressed Congress to act quickly.
"It's critical that we pass this," Stabenow said Tuesday. "This is an opportunity to immediately stimulate auto sales across the country."
Under the Stabenow plan, owners of cars and trucks that get less than 18 m.p.g. could get a voucher of $3,500 to $4,500 for a new vehicle, depending on the mileage of the new model. The voucher would replace any trade-in value, since the old model would be scrapped.
Backers say the compromise would cost about $4 billion -- paid for with money from the economic stimulus plan passed earlier this year -- and could boost sales by 1.3 million vehicles over a year, according to industry officials.
But critics note that the plan favors owners of trucks over cars: even 15 years ago, only five models of midsize sedans managed just 18 m.p.g.
The Feinstein plan would add a $2,500 voucher, require old models to get less than 17 m.p.g., and require larger mileage improvements for the larger voucher. It would also offer a $1,000 voucher for buying efficient used models.
+ "Cash for Clunkers' Incentives Program to Buy New Car
+ Cash-For-Clunkers: Pickup Trucks Buyer to Be Winners
The U.S. Chamber of Commerce backed the Stabenow bill in a letter to Congress on Tuesday, saying it would offer the best mix of economic and environmental benefits.
Stabenow offered the plan as an amendment to a Senate bill setting new controls on tobacco products. It wasn't clear Tuesday evening when Feinstein might offer her plan.
Sunday, May 31, 2009
UK's Car Scrappage Scheme Boosts Cars Sales
There was some encouraging news for the UK’s hard-pressed car industry yesterday when the Government confirmed that 35,000 cars have been ordered as a result of its car scrappage scheme.
The numbers equate to one scrappage scheme order in every five new car orders since the scheme – which offers a £2,000 subsidy for people trading in vehicles 10 years or older for new models – went live earlier this month.
Business Secretary Lord Mandelson was present as Prime Minister Gordon Brown welcomed six new car buyers who had benefited from the scheme to Downing Street.
Mr Brown said: “I am determined to do everything I can to see Britain through the downturn quickly and build a stronger Britain for the future. That is why I am delighted that over 35,000 people have already taken up the Government’s offer of help to buy a new car when they scrap their old one.
“This scheme not only helps hard-pressed consumers, it also helps protect British jobs by stimulating demand for new cars.”
The scheme, with £300m from Government and matched funding from manufacturers, is designed to provide immediate support in the short-term for the car industry and its supply train in the wake of falling sales.
The £2,000 grant, made up of £1,000 from Government and the same from vehicle manufacturers, will run until March next year.
Chief executive of the Wales Automotive Forum, Tim Williams, said the scheme was starting to have an impact on sales, but a full recovery was still some way off.
In the past 10 months the automotive component industry has haemorrhaged some 4,500 jobs in Wales.
In 2007 the sector employed 25,000, but now has just more than 20,000. However, the majority of job losses have been among temporary staff.
Mr Williams said: “The large companies bring in temporary workers for given contracts or when there is a upturn in demand. However, unfortunately, they are the first to be hit in a downturn, but we have also lost core workers in Wales as well.”
The automotive components sector is dominated by the big international firms such as Ford, which employs 2,000 at its engine plant in Bridgend and the Toyota plant at Deeside which employs 700.
In total there are 40 international firms in Wales, which employ the bulk of the current workforce with 16,000. Some 150 smaller firms in Wales mainly form part of their respective supply chains.
Despite the current downturn Mr Williams said: “In the UK we still have 27 manufacturing plants of one size or another.
“People need to be aware that manufacturers in the sector are still in a powerful position and are a significant employer. When you take in the retail and distribution side, there are 850,000 employed in the UK.”
“Jaguar Land Rover, Honda, Toyota and Nissan are still extremely important.”
In output terms the industry has seen around a 40% dip since the start of the slowdown.
Mr Williams said: “I am still reasonably confident looking forward, with output returning to pre-downturn levels by around 2012-13. However, I don’t think in Wales we will get to the employment level of 25,000. We could get to around 22,000 – mainly as a result of greater efficiencies in the way businesses operate.”
Mr Williams said it was critical that Wales positioned itself strategically to exploit the shift towards lower and zero emitting vehicles, such as hybrid and electric only vehicles.
He added: “This is where the Government is pouring its money into. Wales is starting to develop companies like Connaught in this area and in academic research – like the work being under taken by Atraverda and the University of Glamorgan.”
The two announced the opening of the UK’s first Advanced Bi-polar Battery Development research facility based at the university.
Mass take up of electrical cars in the UK is not anticipated until between 2030-50.
Mr Williams said: “This is going to require new thinking and ideas, not just in the making of cars, but in the infrastructure needed to generate the power for these electrical cars.
“This could be through a new nuclear power station programme, wind, solar, or energy produced as the result of a Severn Barrage.
“We also need to consider the infrastructure for recharging electrical vehicles and ask whether people will be able to plug-in batteries at home or at locations such as supermarkets?”
The retail element of the automotive sector in Wales, which covers sectors from car dealerships and after part sales companies to car rental and breakdown firms, employs around 25,000 in Wales – through some 3,500 employers.
Colin Williams, national manager for Wales for the Institute of the Motor Industry – a sector skills council for the automotive retail industry, said the scrappage scheme is helping.
“I was with a large car dealership in North Wales this week and he said the car scrappage scheme is already having a positive impact on his business,” said Mr Williams. “However, it varies from manufacturer to manufacturer, with some having straightforward schemes, others, more complicated.”
+ UK Scrappage Scheme Officially Kicked Off
+ Two Nissan GT-R Deals on UK Scrappage Scheme
Mr Williams said the dealerships at the luxury end of the market were unlikely to see people trading in old vehicles for top-of- the-range vehicles like Jaguars, but car retailers at the bottom end were benefiting.
“As far as the retail industry is concerned it is not all doom and gloom, with some areas doing quite well despite the recession,” said Mr Williams.
“Many people are opting to keep their cars on the road longer, which means more repairs and MoTs which is benefiting independent suppliers of components and those in after-sales.The second-hand car sector is also quite buoyant.”
Around 12,220 on the retail side are employed in vehicle sales [dealership], with an estimated 75% dealing exclusively in new cars. Mr Williams said latest employment figures would be published shortly.
“What I am picking up on the ground is that the recession is having an impact. There are dealerships closing and as result people are losing their jobs.
“Good sales people are hard to come by and once you lose them they are hard to get back.”
He said new car dealers should look at re-deploying key sales staff to other areas, like components and second hand vehicles.
The numbers equate to one scrappage scheme order in every five new car orders since the scheme – which offers a £2,000 subsidy for people trading in vehicles 10 years or older for new models – went live earlier this month.
Business Secretary Lord Mandelson was present as Prime Minister Gordon Brown welcomed six new car buyers who had benefited from the scheme to Downing Street.
Mr Brown said: “I am determined to do everything I can to see Britain through the downturn quickly and build a stronger Britain for the future. That is why I am delighted that over 35,000 people have already taken up the Government’s offer of help to buy a new car when they scrap their old one.
“This scheme not only helps hard-pressed consumers, it also helps protect British jobs by stimulating demand for new cars.”
The scheme, with £300m from Government and matched funding from manufacturers, is designed to provide immediate support in the short-term for the car industry and its supply train in the wake of falling sales.
The £2,000 grant, made up of £1,000 from Government and the same from vehicle manufacturers, will run until March next year.
Chief executive of the Wales Automotive Forum, Tim Williams, said the scheme was starting to have an impact on sales, but a full recovery was still some way off.
In the past 10 months the automotive component industry has haemorrhaged some 4,500 jobs in Wales.
In 2007 the sector employed 25,000, but now has just more than 20,000. However, the majority of job losses have been among temporary staff.
Mr Williams said: “The large companies bring in temporary workers for given contracts or when there is a upturn in demand. However, unfortunately, they are the first to be hit in a downturn, but we have also lost core workers in Wales as well.”
The automotive components sector is dominated by the big international firms such as Ford, which employs 2,000 at its engine plant in Bridgend and the Toyota plant at Deeside which employs 700.
In total there are 40 international firms in Wales, which employ the bulk of the current workforce with 16,000. Some 150 smaller firms in Wales mainly form part of their respective supply chains.
Despite the current downturn Mr Williams said: “In the UK we still have 27 manufacturing plants of one size or another.
“People need to be aware that manufacturers in the sector are still in a powerful position and are a significant employer. When you take in the retail and distribution side, there are 850,000 employed in the UK.”
“Jaguar Land Rover, Honda, Toyota and Nissan are still extremely important.”
In output terms the industry has seen around a 40% dip since the start of the slowdown.
Mr Williams said: “I am still reasonably confident looking forward, with output returning to pre-downturn levels by around 2012-13. However, I don’t think in Wales we will get to the employment level of 25,000. We could get to around 22,000 – mainly as a result of greater efficiencies in the way businesses operate.”
Mr Williams said it was critical that Wales positioned itself strategically to exploit the shift towards lower and zero emitting vehicles, such as hybrid and electric only vehicles.
He added: “This is where the Government is pouring its money into. Wales is starting to develop companies like Connaught in this area and in academic research – like the work being under taken by Atraverda and the University of Glamorgan.”
The two announced the opening of the UK’s first Advanced Bi-polar Battery Development research facility based at the university.
Mass take up of electrical cars in the UK is not anticipated until between 2030-50.
Mr Williams said: “This is going to require new thinking and ideas, not just in the making of cars, but in the infrastructure needed to generate the power for these electrical cars.
“This could be through a new nuclear power station programme, wind, solar, or energy produced as the result of a Severn Barrage.
“We also need to consider the infrastructure for recharging electrical vehicles and ask whether people will be able to plug-in batteries at home or at locations such as supermarkets?”
The retail element of the automotive sector in Wales, which covers sectors from car dealerships and after part sales companies to car rental and breakdown firms, employs around 25,000 in Wales – through some 3,500 employers.
Colin Williams, national manager for Wales for the Institute of the Motor Industry – a sector skills council for the automotive retail industry, said the scrappage scheme is helping.
“I was with a large car dealership in North Wales this week and he said the car scrappage scheme is already having a positive impact on his business,” said Mr Williams. “However, it varies from manufacturer to manufacturer, with some having straightforward schemes, others, more complicated.”
+ UK Scrappage Scheme Officially Kicked Off
+ Two Nissan GT-R Deals on UK Scrappage Scheme
Mr Williams said the dealerships at the luxury end of the market were unlikely to see people trading in old vehicles for top-of- the-range vehicles like Jaguars, but car retailers at the bottom end were benefiting.
“As far as the retail industry is concerned it is not all doom and gloom, with some areas doing quite well despite the recession,” said Mr Williams.
“Many people are opting to keep their cars on the road longer, which means more repairs and MoTs which is benefiting independent suppliers of components and those in after-sales.The second-hand car sector is also quite buoyant.”
Around 12,220 on the retail side are employed in vehicle sales [dealership], with an estimated 75% dealing exclusively in new cars. Mr Williams said latest employment figures would be published shortly.
“What I am picking up on the ground is that the recession is having an impact. There are dealerships closing and as result people are losing their jobs.
“Good sales people are hard to come by and once you lose them they are hard to get back.”
He said new car dealers should look at re-deploying key sales staff to other areas, like components and second hand vehicles.
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