Auto slump normal after ‘Clunkers’ program

As the auto industry posted September drops across the board with the expiration of the government “Cash for Clunkers” program, Baton Rouge dealerships are also feeling the slump. Bob Israel, president of the Louisiana Auto Dealers Association, says Louisiana dealerships have dropped an estimated 30% to 40% from August, but that downward trend is normal after any stimulus to the market. “A lot of people were enthusiastic and upbeat about buying cars even if they weren’t qualified to buy clunkers,” he says. “We’ve pre-sold the market for a few months.” For September, General Motors posted a 45% drop, Chrysler’s sales fell 42% and Ford saw a much more modest drop of 5.1%. Among Japanese auto makers, Toyota’s September U.S. sales declined 16%, while Nissan saw its results fall 7% and Honda’s sales slid 23%. Israel says the program is responsible for around 9,000 to 10,000 car sales in the state, but that the official number will not be known until the 40 days to register a new car expires. “Some dealers have been reluctant to register cars bought through Cash for Clunkers until they get paid, because there is the possibility the application will be rejected,” Israel says. “Until we see those registrations in black and white, we won’t have an official number.”—Emma James