Celebrate cash-for-clunkers' winners, but remember the losers


The hits just keep on coming for the Car Allowance Rebate System, or CARS, the program that everybody still calls "cash for clunkers." Just last week, for instance, Ford announced that it is ramping up production of two of its models, the Ford Focus compact and the Ford Escape SUV, because demand is outpacing supply.

"Under the cash-for-clunkers program, the Ford Escape and Focus are flying off dealer lots," gushed Mark Fields, company president, who admittedly hasn't had a lot to gush over this year.

So, then, great news if you are a car manufacturer or dealer, right?

Well, it depends on who you are. At least 25 percent of the auto industry is getting no help at all and may be dragged down even further by CARS. These are the companies and dealers that don't have products eligible for cash for clunkers in any significant number, either because their products have a base price higher than the program's $45,000 threshold or fuel mileage so low that it keeps them from qualifying.

On the Web site for Porsche of Orlando in Maitland, there's a big green CARS advertisement: "Get up to $4,500 for your clunker!" Not so fast, said Jim Lynch, who sells Porsches for the company: "We are an AutoNation dealer, and AutoNation automatically puts that on all their dealers' Web sites. We don't have anything that qualifies for the program, since all our models start at more than $45,000. A lot of companies are in the same boat, like Mercedes-Benz, BMW and Audi."

The least expensive Porsche is the Boxster, which averages a respectable 24 miles a gallon but starts at $46,600 — just $1,600 over the maximum. That maximum is for base price only, so you have to wonder if some of the companies aren't contemplating a quick, "special edition" vehicle that starts at $44,995, with previously standard equipment offered as an option. As long as the vehicle starts at under $45,000, the government doesn't care what the grand total, after-option price is.

Same thing at Collier Jaguar in Orlando, where salesman Abner Marrero said he would "love it if the cash-for-clunkers bill could apply to us. It isn't helping us at all." The least expensive Jaguar is the XF, starting at $52,000.

You think, perhaps, that premium dealers are making premium profits, and don't need any help? Not the case. According to Automotive News, Jaguar sales last month were down 45.3 percent from July 2008. Porsche sales dropped 50.6 percent.

Other premium or niche manufacturers are reporting major sales decreases through the first seven months of 2009, compared with the same period last year. BMW is down 29.3 percent, Saab is down 57.7 percent, Bentley is down 58.2 percent, Maserati is down 55.3 percent, and Hummer is down 61.2 percent.

This is not to say the bleeding is limited to premium brands: During that same period, previously red-hot Mini dropped 18.1 percent, and sales of the tiny, fuel-sipping Smart dropped 28.5 percent. Undoubtedly, CARS will help those two brands. No such luck for Jaguar, Porsche and their contemporaries. And it is possible that CARS will, in the long run, hurt those brands even more, if, say, a family takes advantage of CARS to buy a son or daughter an economical car with money they may have spent later upgrading their own vehicle.

This also applies to motorcycle dealers, who had been hopeful about CARS because some early versions of the bill would have included them. "We have motorcycles and scooters that get fantastic mileage," said Kirby Mullins, owner of Seminole Power Sports. "Some of them can get 120 miles per gallon. We had our fingers crossed that we might be included in some version of the bill, but obviously we weren't."

So let's celebrate the success of manufacturers and dealers that are doing well thanks to CARS, don't assume that this rising tide is raising all the boats. At least there is one, somewhat bright spot for the left-out dealers: They won't have to contend with the sudden sound of crickets and the sight of tumbleweeds blowing through the showrooms the day after the cash-for-clunkers money runs out.

Sentinel Automotive Editor Steven Cole Smith can be reached at 407-420-5699, scsmith@orlandosentinel.com or through his blog at Enginehead.com.

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