“Cash for Clunkers” gives Positive Edge to Foreign Car Makers!

September 2nd, 2009 | Economy

The US biggest hit in the last month “Cash for clunkers” gives the largest and a very positive change to the foreign auto industry. Overall US auto sales in August are the highest in more than a year, according to industry figures released Tuesday; this is done only with the rebate program. In the US there are so many foreign carmaker companies. Carmakers sold more than 1.2 million cars and trucks, up 1% from the same month last year and the first year-over-year sales gain since August 2007. The South Korean auto makers provide the biggest sales surprise, with Hyundai reporting a 47% jump. GM, which finished second to Toyota Motor Corp. in clunker sales, suffered a 20% sales decline. GM executives, however, described August as an “excellent” month, saying the automaker maintained its share of the US market and noted that it faced a tough comparison with August 2008, when sales were juiced to their highest level of the year by special pricing tied to the company’s 100th anniversary.

It was the Asian companies, which rely more heavily on the smaller fuel-efficient vehicles that drove clunker sales that clearly reaped the biggest gains. For instance, many of the hottest-selling Japanese cars, such as the Toyota Camry and Civic, are built in the US. The car dealerships are some of the nation’s biggest generators of sales tax receipts.

Toyota, which captured the largest percentage of clunker sales at 19.4%, said it sold 225,088 vehicles in August, up 6.4% from a year earlier. It was the Japanese automaker’s best sales month since May 2008, as buyers snapped up Corollas, Priuses and RAV-4 SUVs. So, in simple “cash for clunkers” program has changed the auto industry positively and given the benefit to the US economy.

Watch the video “Blessing Or Curse? – Cash For Clunkers – Bloomberg”