Autosales Drop Without Clunkers Program

With the end of the government's Cash-For-Clunkers program, the number of cars being sold has dropped back to levels that were seen before the clunkers program was launched. The head of Chrysler's sales organization, Peter Fong, said, "We believe the remainder of 2009 will continue to be a challenge for the U.S. automotive market". The article states,

The good news for automakers is that the market is no longer deteriorating, though it is not improving very quickly. Also, the clunkers program cleared out inventories at many dealerships, leading G.M., Ford and other manufacturers to increase production at some plants and call back thousands of laid-off workers to their assembly lines. The depleted stocks hindered sales at many dealers in September but left the automakers in a better position to compete and make profitable sales in the months ahead.

Although that it may seem that the cash for clunkers was only a temporary program that did little to help the auto industry, the reasons stated above support the fact that it did more than just give a little boost on sales of cars. It could not be expected that the number of car sales would remain as high as they were when the program was still in operation.