Business

Car dealers struggling in the aftermath of Cash-for-Clunkers program
by Zuzana Zelenakova

August ended up as a quite successful month for auto makers as US government´s Cash-for-Clunkers program helped to boost car sales significantly. It gave people vouchers worth $3,500 to $4,500 to replace their old cars for newer, more fuel-efficient and environment friendly ones. Ford for example reported 17.2 percent increase in auto sales as compared to the same time a year ago. However, now it seems that auto industry has to return to reality. Sales have declined again and car dealers are struggling in the Cash-for-Clunkers aftermath. And no one is sure about how long will this status quo last. "Consumers were spoiled with big incentives and with Cash for Clunkers,! " said Edmunds.com senior analyst Jessica Caldwell. "There was a big party. Now it's over and back to reality." It certainly does not help that auto dealers are slow to renew their inventories after clunker sales reduced them to almost record low numbers. So people who are willing to buy a car even in this time do not have much to choose from. David Kelleher for example, a car dealer that runs his business in the Philadelphia area, usually has 350 to 400 vehicles in stocks, but now, after clunkers program, it is only about 50. "We're back into that let's-wait-and-see mode," he said. "People aren't 100 percent sure about the economy yet." Based on the research carried out by University of Michigan, consumer confidence rose from 65.7 percent in August to 70.2 percent in September so far. This is probably one of the factors that lead some experts to conclusions that stimulus programs including Cash-for-Clunkers will get the economy out of recession during this quarter. However! , unemployment rates are still on the rise. With 216,000 peopl! e loosin g their job last month, it rose to 9.7 percent, which is the highest since 1983.

related story (sgx15357): http://news.yahoo.com/s/ap/20090913/ap_on_bi_ge/us_life_afte...

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 3:40 PM