The most common deals under the government's $3 billion "Cash for Clunkers" program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that get only marginally better gas mileage, according to an analysis of new federal data by the Associated Press.
Cincinnati Ford dealers were boosted from the Clunkers. One of the top dealers, www.cincyford.com saw sales grow 2-3 times the dealerships norm. Fuel effecient Ford models led the charge.
The single most common swap -- which occurred more than 8,200 times -- involved Ford F150 pickup owners who took advantage of the government rebate to trade their old trucks for new Ford F150s. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg, an improvement of 1 mpg to 3 mpg over the clunkers.
Owners of thousands more big, old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 dealerships in every state.
The government reported spending $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins -- in apparent violation of the program's requirements. The government said it is investigating those reports.
The National Highway Traffic Safety Administration is reviewing the reports, and any dealers that submitted invalid trade-ins will be told to return the government rebate, spokesman Eric Bolton said yesterday.
The new data include details of 677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the new vehicles purchased under the program -- or about one in seven -- got less than 20 mpg, the data showed.
Popular high-mileage commuter cars including the Toyota Corolla, Honda Civic, Toyota Camry and Ford Focus were among the 10 most popular new vehicles bought under the four-week program, with 105,280 of those models sold for a total of about $2 billion.
Some deals raise eyebrows:
• In at least 145 cases, mostly involving trucks, consumers traded for new vehicles that get the same or worse mileage than their old ones.
• In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that get 6 mpg.
• A driver in Arlington, Va., traded a 1999 Ford Explorer with 15 mpg in July for $3,500 toward a new $28,000 Jeep Commander that weighs about 4,700 pounds and gets 16 mpg.
• In at least 32 deals, drivers traded older vehicles for new large trucks that get 14 mpg.
Friday, November 6, 2009
Ford On The Rise
Ford has been riding a wave of positive public sentiment since it avoided bankruptcy and did not take federal bailout money — unlike General Motors and Chrysler.
Long standing Ford dealerships as well as newly acquired are beginning to see the fruits of their labor. Those dealerships that have withstood the trying times of the previous 12-15 months are fiscally better thanin the past. One such newly acquired dealership can be found at www.cincyford.com. The change in culture and attitude has helped this dealership grow in a difficult market.
How has Ford managed to outperform its Detroit competition — and what challenges lie ahead? Here are some questions and answers.
Q: How did Ford escape bankruptcy protection and federal aid, unlike GM and Chrysler?
A: In 2006, Ford mortgaged its assets — including plants and its blue oval logo — for $23.4 billion to fund its turnaround plan. The credit markets later froze, making it impossible for its rivals to obtain similar financing.
Q: What else sets Ford apart from its domestic competitors?
A: Ford gets consistently solid quality and reliability rankings.
The automaker won kudos last week with the release of Consumer Reports' 2010 vehicle reliability rankings. The Ford Fusion and Mercury Milan midsize sedans beat out Toyota's Camry and Honda's Accord, and 46 of 51 Ford vehicles had average or better reliability.
By comparison, less than half of GM's 48 models scored that well, and the Chrysler brand finished last out of 33 brands in the survey.
Q: How have Ford's sales fared in the tough economic climate?
A: Ford's U.S. sales were down 22 percent in the first nine months of this year, compared with the same period in 2008, as the industry struggled through its worst year in a quarter century. But Ford is siphoning customers from its rivals. It posted the largest increase in market share of any automaker in September, and expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995.
Q: Did the Cash for Clunkers program help Ford?
A: The Ford Focus and Ford Escape were among the top five sellers in the government's Cash for Clunkers program in late July and August. The program allowed Ford to spend less on rebates, and helped profitability as the company boosted production to replenish inventory. But sales slumped in September after the program ended.
Q: How could Ford's labor problems hurt its turnaround efforts?
A: Ford workers agreed to $500 million in concessions earlier this year, while workers at GM and Chrysler approved concessions that saved their companies more than $1 billion each.
Ford and a United Auto Workers negotiating committee agreed in October to contract changes that would bring Ford's labor costs in line with GM and Chrysler. But a ratification vote was defeated by Ford's 41,000 UAW members in part because workers view the company as healthier than its Detroit rivals.
Q: What other issues could hurt Ford's turnaround?
A: Ford had $26 billion in debt at the end of the second quarter, and has been unable to cut costs as deeply as GM and Chrysler were able to do in bankruptcy. Ford also has said its return to profitability relies, in part, on a recovery in U.S. and European sales, but it's unclear how quickly those markets will turn around.
Customers' continued shift away from profitable sport utility vehicles and pickups to lower-margin small cars also is a continuing challenge.
Long standing Ford dealerships as well as newly acquired are beginning to see the fruits of their labor. Those dealerships that have withstood the trying times of the previous 12-15 months are fiscally better thanin the past. One such newly acquired dealership can be found at www.cincyford.com. The change in culture and attitude has helped this dealership grow in a difficult market.
How has Ford managed to outperform its Detroit competition — and what challenges lie ahead? Here are some questions and answers.
Q: How did Ford escape bankruptcy protection and federal aid, unlike GM and Chrysler?
A: In 2006, Ford mortgaged its assets — including plants and its blue oval logo — for $23.4 billion to fund its turnaround plan. The credit markets later froze, making it impossible for its rivals to obtain similar financing.
Q: What else sets Ford apart from its domestic competitors?
A: Ford gets consistently solid quality and reliability rankings.
The automaker won kudos last week with the release of Consumer Reports' 2010 vehicle reliability rankings. The Ford Fusion and Mercury Milan midsize sedans beat out Toyota's Camry and Honda's Accord, and 46 of 51 Ford vehicles had average or better reliability.
By comparison, less than half of GM's 48 models scored that well, and the Chrysler brand finished last out of 33 brands in the survey.
Q: How have Ford's sales fared in the tough economic climate?
A: Ford's U.S. sales were down 22 percent in the first nine months of this year, compared with the same period in 2008, as the industry struggled through its worst year in a quarter century. But Ford is siphoning customers from its rivals. It posted the largest increase in market share of any automaker in September, and expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995.
Q: Did the Cash for Clunkers program help Ford?
A: The Ford Focus and Ford Escape were among the top five sellers in the government's Cash for Clunkers program in late July and August. The program allowed Ford to spend less on rebates, and helped profitability as the company boosted production to replenish inventory. But sales slumped in September after the program ended.
Q: How could Ford's labor problems hurt its turnaround efforts?
A: Ford workers agreed to $500 million in concessions earlier this year, while workers at GM and Chrysler approved concessions that saved their companies more than $1 billion each.
Ford and a United Auto Workers negotiating committee agreed in October to contract changes that would bring Ford's labor costs in line with GM and Chrysler. But a ratification vote was defeated by Ford's 41,000 UAW members in part because workers view the company as healthier than its Detroit rivals.
Q: What other issues could hurt Ford's turnaround?
A: Ford had $26 billion in debt at the end of the second quarter, and has been unable to cut costs as deeply as GM and Chrysler were able to do in bankruptcy. Ford also has said its return to profitability relies, in part, on a recovery in U.S. and European sales, but it's unclear how quickly those markets will turn around.
Customers' continued shift away from profitable sport utility vehicles and pickups to lower-margin small cars also is a continuing challenge.
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