August 6, 2009: NBC12 Live In-Studio Interview Concerning Cash for Clunkers Progress at McGeorge Toyota
Richmond Times Dispatch: Richmond-area car dealers get 'clunkers' boost
By Louis Llovio
Published: August 4, 2009
Car buyers looking to take advantage of the "cash for clunkers" program poured into dealerships last month, helping Ford Motor Co. post its first U.S. sales increase in two years and giving Richmond-area car dealers a much-needed boost.
"This past weekend was absolutely nuts," said Dennis Ellmer, president and CEO of Hampton Roads-based Priority Auto Group, who owns seven dealerships in Virginia, including Priority Toyota of Richmond in Chester and the Priority Used Car Supercenter in Colonial Heights.
Ellmer said his stores had sold 300 vehicles during the weekend, a little more than half of which were part of the clunkers program. Many of the others came to his stores lured by the prospects of the program, he said.
"At my Chevrolet store, we sold more cars this weekend than in all of June," he said.
Congress approved the clunkers program in July, but a frenzy of car-buying in its first week nearly depleted its funding and prompted the U.S. House of Representatives to take emergency action last Friday to approve an additional $2 billion for the program. The Senate also must vote before its August vacation starts this Friday.
If the Senate doesn't approve the money, the program may not survive beyond Friday, President Barack Obama's spokesman said yesterday.
The Car Allowance Rebate System gives owners of older gas-guzzling cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle. Their old vehicles then are disabled and scrapped.
The program has flooded area dealerships with customers, and it led to a big increase in sales this past weekend.
Richmond Ford on West Broad Street sold 51 vehicles under the clunkers program in July, 12 of which occurred during the weekend. It had four deals working yesterday.
Bill Talley Ford in eastern Henrico County sold 25 vehicles, six of them this past weekend.
And Sheehy Ford has made a total of 100 deals at its Midlothian Turnpike and Ashland locations, with 34 of those made this past weekend.
Nick Scola, marketing manager for McGeorge Car Co., said its Toyota store on West Broad Street "saw an extraordinary amount of traffic on both our newand used-car lot" this past weekend.
The dealership sold 22 new Toyotas on Saturday, nine of them clunker sales, he said. As of yesterday, the dealership had sold 102 vehicles under the program.
But as cars leave the lots, dealers face two problems, they said.
First, the process for them to apply for reimbursement continued to be a struggle, with dealers having to dedicate staff or come in during off hours to process the claims. Second, the low inventory levels is a concern.
"I stock about 180 cars at my Chesapeake Toyota store," Ellmer said. "But I sold 94 this weekend. They just can't make them fast enough."
The heavy sales nationally helped push sales for manufacturers in July. Sales from this past weekend will be counted in August sales reports.
The clunkers program was expected to boost U.S. industry sales overall, which were down 35 percent in the first half of 2009.
July sales of Ford, Lincoln and Mercury light vehicles rose 1.6 percent from the same month last year. It was the first year-over-year rise since November 2007.
Ford sold 158,354 vehicles, a 2.2 percent increase compared with June's figures, showing that the worst U.S. auto sales slump in a quarter-century may be easing.
George Hoffer, a professor of economics at Virginia Commonwealth University, said the incentive has created the third automotive "frenzy" of this decade.
The first came after the Sept. 11 terrorists attacks when manufacturers began offering zero percent financing to attract customers. And in 2005, GM pushed its employee-pricing program.
But it remains unclear whether customers will keep buying once the demand eases and the incentive runs out.
Mike Blades of Prince George County said he was going to go out shopping today for a new vehicle to replace his 1993 Chevy pickup truck.
"I hadn't even been thinking about buying a car, but this is a good opportunity. They're giving you free money," he said.