Sales of new cars at local dealerships are starting to slip as “Cash for Clunkers” fades into the rearview mirror.
Vehicle registrations in Richmond, Chesterfield and Henrico fell more than 20 percent in October from the previous month for a total of 2,045 registrations. In September, registrations in the three localities totaled 2,584 and included the tail end of Cash for Clunkers transactions.
And although Cash for Clunkers generated sales for many area dealers, the registration data shows area buyers were more active in August of last year, which was just before the meltdown in the financial markets. This August, which was the busiest for the trade-in program, 3,127 vehicles were registered in the area. That is about 40 fewer than were registered the same month in 2008.
Registration data is a rough indicator of sales by showing who is buying vehicles and may lag the actual sale by a couple of weeks, according to Mike Allen, director of public affairs for the Virginia Auto Dealers Association.
BizSense called a handful of car dealers, but none called back.
The auto industry has its fingers crossed that the momentum generated by the government incentive program, which gave consumers a $3,500 credit when they traded in a gas guzzler for a more fuel efficient model, would jump-start the moribund industry. There is also concern in the industry that consumers who would have bought a new car anyway just got one sooner – and that no new demand was created. That would cause a slump in the near future.
“November for us will be more telling,” said Allen. “The word I am getting from dealers is while sales haven’t been strong, they have been stronger than expected, and I think we are seeing that nationwide.”
This year’s October registrations were below the same month last year by nearly 17 percent. Allen said that might be because many dealers depleted inventory during Cash for Clunkers and are in the process of restocking.
“Some models were very hot sellers under Cash for Clunkers,” said Allen. “What we saw in October was a real shortage of those popular vehicles.”
Allen remains optimistic that the worst is over and that car sales have passed the bottom and will start to climb.
“Economists think we may see 10 percent growth in 2010,” Allen said. “I hope they are right.”
Al Harris covers retail for BizSense. Please send news tips to Al@richmondbizsense.com.
The only thing cash for clunkers did was destroy almost 690,000 running cars. As a result, used car prices are up and revenue from car donation is down.
The only good C4C did was it bought Obama some votes, other than that, it took nearly 700,000 perfectly good working cars and destroyed them only proving to the rest of the world just how wasteful the American people really are! I hope the American automakers die a HORRIBLE painful death now and what do you know, it will be on Obuma’s watch. Try and blame Bush now.