Wednesday, August 05, 2009

Cash For Clunkers, Part II: Da Aftermath.... What Cars Are Being Traded In .

The Ford Exploder, Uh ... Explorer. By Far The Biggest Loser !!
'For Every Action, There Is an Equal and Opposite Reaction'..... Einstein. Actually, we're not 100% sure that it was Einstein who said that, and we're too lazy to confirm that, but it sure sounds like him. Yesterday, we gave you the numbers of which cars Americans were buying as part of the Cash For Clunkers program. It was pretty obvious that there was a serious Japanese slant towards the purchases. Today, we got the numbers for the Red-Headed Stepchildren. The Bastards. The cars that Americans were more than willing to get rid of - even at the expense of having payments for the next 36 to 72 months....
Perhaps just as important as what cars are being purchased, are what cars are going. That is, which cars have no future, which cars have poor value by consumers. If everyone was trading in their Toyota 4 Runner for a prius to save money on gas, maybe The Big Three would have nothing to worry about. Well, let's just say that Detroit has A LOT to be concerned about.......Here are the top trade-in's in the Cars For Clunkers so far....
1. Ford Explorer
2. Ford F-150
3. Chevy C1500 Pickup
4. Chevy Blazer
5. Jeep Grand Cherokee
6. Dodge Caravan
7. Ford Windstar
Now, you don't have to be Horatio Cain to deduct any conclusions from this one..... THEY'RE ALL AMERICAN CARS !!!!! In fact, six of the Top Ten cars traded in were different years of the Ford Explorer. Now, the not-so-bad news for Ford is that two of the ten cars being bought were the Ford Focus and Escape. This is the bright red flashing light to Ford exec's - IT'S TIME TO STOP MAKING EXPLORERS !!!!! Cut it down to the Escape, and a few Expeditions. Honda has been bitched at for years to make an SUV bigger than the Pilot for a decade, and smartly, they've resisted. Ford and GM aren't that smart. Dodge has no idea what they're doing - everything they make, including the Caliber, looks like a Jeep...... Hope these numbers change your thinking.
Clearly, there was a trend of consumers trading in their Big, American SUV's and vans in for smaller Japanese cars. Now, not everyone is doing this. Economist Reino is telling you right now, this spike in sales is temporary. As soon as this program ends, the American carmakers are in deep, deep doo-doo. OK, deep shit. Sales will plummet back to pre-C4C levels. It's kinda like in 'Jaws 2', when the shark attacked those two kids on the boat... The kid got back into the boat just enough to see over the side - then Jaws yanked him forever back underwater.
Lastly, if you own an Explorer, F-150 , Blazer or Caravan, the only advice I can give you is to hold onto it, and ride out the storm. Why? Because the market is now so flooded with gas guzzling SUV's that you probably just lost another $1000 in Blue Book Value. Supply and Demand, folks..... Supply and Demand. In hindsight, Cash For Clunkers isn't a failure on all aspects: some cars got sold, just the wrong ones. It was a gimmick, and we will pay for it in the end. We redistributed wealth even further from the US to Japan, and the net worth of a slew of Americans went down, both those who did and didn't buy a car....
The writing's on the wall people... The US will forever be a second-rate auto power from now on. Get used to it. This is how the marketplace works. Ford, GM and Chrysler need to get leaner and meaner, and Michigan, Ohio and Indiana need to find new employers. It ain't coming back.....

1 comment:

i like my gmac mg said...

MSN gonna be your downfall yet