'Clunkers' Program Benefits Foreign Automakers More, Data Shows


The Obama administration has declared the wildly popular 'Cash for Clunkers' program a success, saying it has revived the country's ailing auto industry and taken polluting vehicles off the road.

But the data shows that the program, which ends Monday, has apparently benefited foreign automakers more than their U.S. counterparts.

Smaller, more fuel efficient vehicles like the Toyota Corolla are top sellers, while buyers are trading in SUV's like the Ford Explorer to be scrapped, turning the already dwindling number of American car owners into the growing ranks of foreign car drivers.

Toyota vehicles accounted for 19.2 percent of the 489,269 sales, while General Motors had the second spot at 17.7 percent.

The Honda Civic was the second best-selling vehicle, followed by the Ford Focus in the third spot. Foreign cars occupied eight of the 10 spots on top-selling vehicle list. The Ford Explorer was the most traded-in vehicle under the program, with U.S. cars occupying all top 10 spots on the list.

Jonas Max-Ferris, a business analyst, told FOX News that domestic automakers did well because "they sold more cars than they would have without the program."

"But they didn't do as well as foreign car makers," he said, noting that Detroit's Big Three represent about 47 percent of U.S. car sales and only sold an estimated 42 percent under the program.

"They did a little worse than they normally would do…which means people were favoring Honda and Toyota primarily," he said. "And there's a reason for that. The program was basically geared around miles per gallon. It was not an incentive to buy U.S. cars. In many cases, the foreign car companies have better cars in those miles per gallon categories."

Car buyers have until Monday night to take advantage of the $3,500 or $4,500 incentives offered by the program, which as of Friday had used up $2 billion of the $3 billion Congress set aside for it.

Congress poured an additional $2 billion into the program when the original $1 billion ran dry in early August and as of Friday, nearly 490,000 vehicles have been sold through the program, data shows.

General Motors and Chrysler, fresh off government-led bankruptcies, have boosted production, along with Toyota, Ford and others. GM is rehiring more than 1,300 laid-off workers, Hyundai is bringing 3,000 workers back to an Alabama plant, and automakers are paying workers overtime to meet demand.

But many auto analysts questions whether the program will have a lasting impact, robbing sales from the final months of 2009 and 2010. A slight auto industry recovery in July and August could be offset by declining sales in September and October and wipe away the bump in consumer confidence.

"We've got inventories tight, prices going up, incentive activity dropping, new cars coming out in October at even higher prices," said Jeremy Anwyl, CEO of the auto Web site Edmunds.com. "There's not going to be much momentum that's going to drive sales to the levels that we've seen."

The Associated Press contributed to this report.

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