Station to Station

Bashing Cash For Clunkers

9/01/2009 12:22:47 PM

A south-based sales manager weighs in on the Cash-For-Clunkers-Is-Good-For-Stations article we did a few weeks back. Clunkers wasn’t all it was cracked up to be, he said.

First off, although it has sold a huge number of cars, these cars have been mainly foreign brands, due to the gas mileage benefits. So, whereas the government wanted to help Detroit, this program has been driven by about 65% of the cars being sold to foreign brands. Secondly, although your industry COOs talk about the revenues gained, what about the revenues cancelled? Toyota has been so successful in the SE, that they have canceled most TV schedules for August due to a lack of new car inventory, because of this program. 

Additionally, many of the small dirt lot dealerships for used cars have gone out of business.  Why? Because the clunkers that they used to buy and refurbish, are now destined to be crushed, regardless of their worthiness.

Lastly, from the dealership side, this has been a nightmare as far as paperwork to be done and the enormous lag time for dealers to get paid.  

So, although the program seems great on the outside, did it really help? Probably not in Sinclair’s eyes despite the remark from the COO.  On 8/21, Sinclair reduced their National Sales Managers from 36 to 10 and let numerous traffic personnel go, via the hubbing excuse. 

Is this the SOP for a company making a million extra that they did not expect?

November