August 2010 car sales hit a 28 year low of 997,468 cars sold, compared to 1,261,997 cars in August 2009. If you adjust for population growth, August 2010 had the lowest car sales since World War II. Why? It depends on whom you ask; In my opinion, it has to do with Cash for Clunkers, along with the current economic recession. Last year Cash for Clunkers ran from July 1st, 2009 until August 24th, 2009, and gave the public a $3500 or $4500 credit if they got rid of their 25 year old car for a new and more energy efficient car. The program resulted in around 680,000 cars traded in for new ones. One year later, those 680,000 customers don’t need a new car.
It was obvious that there was going to be a dip in car sales if the government gave the public an incentive to trade in their car in a one month period. Usually, people sell their cars and then buy new ones throughout the year, but since there was an incentive for only one month, everyone rushed in to trade.
Should there be another government program like Cash for Clunkers for those who missed it in 2009 and to re-stimulate the auto industry until the economy gets better? Or would that just make the car industry dependent on government funding?
David Kabakow
Personally I do not think that we should have another cash for clunkers because I think that is costs the government to much money. In the long term I see how it may pay out but for now we need to be more conservative with the governments money. Also if the automotive industry keeps relying on the government to help stimulate their economy it may lead to a drop in the quality of their products. If they know that the government will always be there for them they will not feel the pressure of the economy and be forced to produce the best products for the most efficient cost.
ReplyDelete^ Billy Knutsen
ReplyDeleteI disagree with Billy on this issue. I believe that even with the economy at a low point the government understands that a bigger issue at hand, the environment. I believe the government made the right decision and another Cash for Clunkers program should arise. It puts more energy efficient cars onto the roads and in the long run helps the economy.
ReplyDelete-Patrick M
Do you think that a program similar to Cash For Clunkers is the right solution to low sales if it needs to repeated year after year?
ReplyDeleteI think it's dangerous to spike sales at one point every year. You run the risk of spiking sales during the program and very low sales for the rest of the year.
ReplyDeleteJack L.