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'Cash For Clunkers' Drives Sales Of Foreign Models
Performance Chevrolet in Sacramento, Calif., participated in Cash for Clunkers. But nationwide, fuel-efficient foreign brands were the top sellers in the program, which ended Monday.
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AP
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The Cash for Clunkers program, which wrapped up Monday, was designed to help struggling Detroit car companies. But the biggest beneficiaries, according to the government, were foreign brands.
According to the Department of Transportation, as of Friday, 59 percent of vehicles bought with Clunkers cash were foreign. The top two sellers were the Toyota Corolla and Honda Civic, both made by Japanese auto manufacturers. The only Detroit vehicles in the top 10 were the Ford Focus and Escape.
Foreign firms control the majority of the U.S. market, but they did even better than usual during the Clunkers program.
Karl Brauer, the editor of the car consumer Web site edmunds.com, says the reason is simple: The program favored gas economy, something Detroit is still working on.
American automakers "tend to make better trucks than fuel-efficient cars," Brauer says. "That's shifting, but right now the imports still definitely have the advantage there."
A set of problems would have been created had Congress tried to tilt the program in favor of Detroit auto manufacturers, he adds.
"Then we'd have gotten into all sorts of trade issues with the program and you'd have people yelling that it was slanted unfairly to benefit the domestic automakers," Brauer says.
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That said, the program did help U.S. manufacturers. It cleared old inventory off dealer lots and helped encourage General Motors to bring back more than 1,300 workers to build more cars.
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