Autoline on Autoblog with John McElroy
Cash For Clunkers Conspiracy?
To hear the government tell it, foreign automakers and compact cars were the big winners in the Cash for Clunkers program. The Department of Transportation makes it look like consumers all wanted small fuel-efficient cars, particularly from the import brands.
But an analysis by Edmunds.com tells a very different story. It found that a fair number of Clunker buyers bought pickups and Ford came out as the clear winner in the Top Ten list. Indeed, Edmunds' analysis shows that the government came up with a bizarre way to count Clunker sales and we know now that the DOT counted sales based on the drivetrain in a vehicle, not by its nameplate. For example, the front-wheel drive version of the Ford Escape was counted separately from the all-wheel drive version. As a result, vehicles that only offer one drivetrain came out on the top of the list.
No one in the history of the auto industry has ever counted sales this way, and it's mighty peculiar why the government would choose to do so. Is there some other agenda at work?
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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The downside is that all around the country the media hammered home the DOT's version of events. Once again, the story is the Detroit Three got their butts kicked by the import brands.
The other story line that the DOT trumpeted is that consumers traded in their dirty old SUVs and bought fuel-efficient, front-wheel-drive compact cars. Boy, doesn't that just dovetail beautifully with the environmental message the Administration wants to send out about the success of this program? But Edmunds' analysis tells a truer story. It shows that full-size pickups and compact SUVs were popular choices in the Clunkers program.
The explanation I've been given is that the way the DOT counted sales is more in line with the different EPA weight-class categories. But that still doesn't make sense. Again, the auto industry has never reported sales by EPA weight-class.
And there are other problems with the DOT numbers, too. It shows that there were more Clunker trade-ins than new vehicles sold. Think about that a minute. How could people possibly trade in more cars than they bought?
Top Clunker Sales According to DOT
1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus FWD
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD
Top Clunker Sales According to Edmunds
1. Ford Focus
2. Ford Escape
3. Honda Civic
4. Ford F-150
5. Toyota Corolla
6. Toyota Camry
7. Honda CR-V
8. Chevrolet Silverado
9. Hyundai Elantra
10. Honda Accord
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To hear the government tell it, foreign automakers and compact cars were the big winners in the Cash for Clunkers program. The Department of Transportation makes it look like consumers all wanted small fuel-efficient cars, particularly from the import brands.But an analysis by Edmunds.com tells a very different story. It found that a fair number of Clunker buyers bought pickups and Ford came out as the clear winner in the Top Ten list. Indeed, Edmunds' analysis shows that the government came up with a bizarre way to count Clunker sales and we know now that the DOT counted sales based on the drivetrain in a vehicle, not by its nameplate. For example, the front-wheel drive version of the Ford Escape was counted separately from the all-wheel drive version. As a result, vehicles that only offer one drivetrain came out on the top of the list.
No one in the history of the auto industry has ever counted sales this way, and it's mighty peculiar why the government would choose to do so. Is there some other agenda at work?
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
____________________________________________________________________________________
Once again, the story is the Detroit Three got their butts kicked by the import brands.
The way that Edmunds counted sales shows a very different story from the government's numbers. In its report, Ford captured three of the top four positions. The Toyota Corolla, which is at the top of the government's list, falls to number five on Edmunds' list behind the F-150, which didn't even make the government's Top Ten. The Chevy Silverado didn't make the government's Top Ten either, but it's number eight with Edmunds.The downside is that all around the country the media hammered home the DOT's version of events. Once again, the story is the Detroit Three got their butts kicked by the import brands.
The other story line that the DOT trumpeted is that consumers traded in their dirty old SUVs and bought fuel-efficient, front-wheel-drive compact cars. Boy, doesn't that just dovetail beautifully with the environmental message the Administration wants to send out about the success of this program? But Edmunds' analysis tells a truer story. It shows that full-size pickups and compact SUVs were popular choices in the Clunkers program.
The explanation I've been given is that the way the DOT counted sales is more in line with the different EPA weight-class categories. But that still doesn't make sense. Again, the auto industry has never reported sales by EPA weight-class.
And there are other problems with the DOT numbers, too. It shows that there were more Clunker trade-ins than new vehicles sold. Think about that a minute. How could people possibly trade in more cars than they bought?
How could people possibly trade in more cars than they bought?
But the biggest puzzle of all is why the Detroit Three have not said a peep about this. Presumably, GM and Chrysler are afraid to bite the hand of the government that just bailed them out. And maybe Ford is just afraid to stir the pot. But they're doing themselves a great disservice by letting this misperception go unchallenged. And if anyone needs to change perceptions, they do.Top Clunker Sales According to DOT
1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus FWD
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD
Top Clunker Sales According to Edmunds
1. Ford Focus
2. Ford Escape
3. Honda Civic
4. Ford F-150
5. Toyota Corolla
6. Toyota Camry
7. Honda CR-V
8. Chevrolet Silverado
9. Hyundai Elantra
10. Honda Accord
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Reader Comments (Page 1 of 3)
ryan 7:35PM (9/01/2009)
I'll kick off the speculative soon to be list of [conspiracy] theories: Perhaps the powers that be want our industry to collapse? Consider this-how many times has our government lied to its people?
Before I get labeled as another tin-foil hat nut job, I challenge any would-be antagonists to read up on one of the following: Operation Paperclip, Operation Northwoods, Codex Alimentarius, or even this stupid H1N1 swine flu nonsense.
I dare 'ya.
Reply
bakka 8:33PM (9/01/2009)
You ARE NOT a nut job. You are BANG on.
Stephane Dumas 8:39PM (9/01/2009)
You might be more closer to the truth then you taught, I spotted this article dated from November 2008 about the subject http://www.humanevents.com/article.php?id=29586#continueA
deslock 7:05AM (9/02/2009)
Stephane Dumas, that article more-or-less says that the following killed the Detroit automakers:
1 US minimum wage too high
2 US regulations for health and safety too strict
3 US civil rights require too much diversity in work force
4 US regulations for pollution too strict
5 US fuel standards too high
6 US corporate tax rate too high
7 UAW got too many concessions for workers
Those are of course relevant, but that article makes it seem like those are the only reasons for Detroit's problems. Notably absent from the article was any mention of:
- The 1970s oil crisis
- Detroit's reliability issues in the 1970s and 1980s
- Increasing executive bonuses
- An explanation of the success Asian and European companies have had producing cars at US factories (even though they are also subject to items 1-5 mentioned above).
For a better overview of how/why imports became so popular at the expense of Detroit's offerings, read The Reckoning ISBN 0688048382.
egsmcahine 8:40AM (9/02/2009)
government doesn't lie, its the people in it, that we elected, that do. and they lie a lot.
Tim 9:52AM (9/02/2009)
If you are going to blame executive compensation for the downfall of the Big-3, I sure hope your complaint is that the stockholders didn't set the bar for performance high enough. Compared to companies of similar size, GM's executives in particular haven't done all that well for years. I am sure there were too many executives, just as there were too many laborers, too many-middle managers, too many accountants, and too many engineers , but individual executive compensation is a non-issue as far as profitability is concerned, except in how compensation motivates individual performance.
mbslrm 7:35PM (9/01/2009)
Once again, the story is the Detroit Three got there butts kicked by the import brands.
Try "their".
And I knew that the DOT counted differently, but I can't believe that trucks made the top 10 list. It just goes to show that todays trucks are pretty fuel efficient (relatively speaking).
Reply
miles 8:14AM (9/02/2009)
Why would the focus change spots on the list? It has only one drivetrain, right? Or are there 2-valve & 4-valve options? Also it says Ford Focus FWD. They are all FWD. Can anyone shed some light on this one? Apparently I'm a bit dim!
James T 11:47AM (9/02/2009)
The Focus has two body styles, Coupe and Sedan, which were probably counted separately.
the4thheat 6:06PM (9/02/2009)
This conspiracy claim is idiotic. Why would the government care about how Ford likes to lump their products? Ford counts sales of all their F-series trucks together so they can proclaim it the best selling truck in America, but that doesn't mean the DOT does.
And since the Focus is only available in FWD I have no idea how the idiots at Edmunds managed to obtain a different count.
the4thheat 6:09PM (9/02/2009)
And as conspiracy theories go this one sucks. Wouldn't the government conspire to make it seem like most of the money went to the Big 3 instead? Why would they waste time trying to purpose make it look like more money went to Toyota and Honda?
BTW who even cares which is the #1 model, this isn't a sales pissing contest, why is Edmunds treating it like it is??
mbslrm 5:15PM (9/04/2009)
The Focus comes in sedan and coupe form.
adam1drift 7:36PM (9/01/2009)
facts and stats don’t matter much to politicians… they make it say what they wanted it to say…
Reply
Tony 8:48PM (9/01/2009)
Exactly! You can have the exact answer you want, it all depends on how you phrase the question or interpret the information.
Matt 10:09PM (9/01/2009)
I believe the saying is "lies, damn lies, and statistics"
cowboy bob 7:38PM (9/01/2009)
I tried to make a clunker deal, but was stymied by the reluctance of the dealers (three), who would not give me a car without a check for $4500.00 to be held until the government gave the dealer the money. (If ever). I also found many instances where the dealers would not sell a car they could get thru dealer swaps when their lot did not have any "qualified" cars. Why didn't the government just give the consumer the money and leave dealers out of it? Income tax credit anyone? This whole "clunker" thing is going to be another example of government not having a clue as to how to effectivly run ANYTHING. PERIOD. I just can't stand it.
Reply
geo.stewart 9:56PM (9/01/2009)
well Poppy,
1) his statement was the dealer he was working with would not initiate the swap, not the other way around (that might make sense)
2) how is the consumer going to fudge the paperwork? dealer is completing and submitting the paperwork based on a vehicle that the consumer is bringing based on a list available to all involved. TEchnically, the consumer is not part of the C4C transaction so why should they provide the collateral?
dont worry, I dont think we'd hire you if you cant keep track of the details.
Chris 1:13AM (9/02/2009)
poopy, you're none too bright. The $4500 isn't collateral - once you drive away and register the vehicle, it no longer can be "taken back" and sold as new. If the gov't fell through, the person would have had to pick up the tab.
And the dealers would get their money, no doubt. So they had no need to hold a check.
Big Mola 7:39PM (9/01/2009)
Oh puh-leez . . . First of all, why would the gov't use numbers that favor foreign brands and risk the robotic backlash from anti-CARS operatives? Secondly, the program used MPG figures as qualifications, and MPG varies by drivetrain, so it does make sense to break out the sales numbers by drivetrain.
Reply
ajkl 7:43PM (9/01/2009)
thank you for having a brain