Detroit — The U.S. Government has invested over $50 billion in General Motors and over $15 billion in Chrysler — and now owns 60 percent and 8 percent of the Detroit automakers, respectively. So what did the same government do when it decided to stimulate the American auto industry (via the so-called cash-for-clunkers) this summer?
It gave a leg up to GM and Chrysler’s competitors.
In a fitting climax to a moralistic, mismanaged program, the feds released figures Wednesday showing that GM and Chrysler lost market share under the stimulus to Japanese and Korean automakers. The reason was in large part due to Washington’s green-lining of dealer lots in order to promote politically correct cars.
While GM and Chrysler’s strengths are trucks, the clunkers program discriminated against larger vehicles by limiting sales to cars and trucks that got an “earth-friendly” 18 mpg or better. As a result, Government Motors lost four percent of market share under the clunkers program. But Chrysler — which has the highest percentage of trucks in its its lineup — was hit particularly hard. The struggling automaker ended with just 6.6 percent of clunker replacement sales — well off its normal market share of 11 percent.
Due to the program’s restrictions, only 65 percent of Chrysler’s lineup was available for purchase. By contrast, Honda — which normally captures 11 percent of market sales and saw its clunkers share grow to 13 percent — benefited from 80 percent of its vehicles being eligible under the program. Korea’s Hyundai — which qualified 100 percent of its vehicles — more than doubled its normal market share to 7.2 percent.
“The U.S.-based companies said they were hampered by a comparative shortage of small, fuel-efficient vehicles that buyers were seeking and that the Asian automakers provided,” summarized the Detroit News.
First the Obama administration punished GM and Chrysler with billions of dollars in added mpg mandates. Now the clunkers program has discouraged customers to “Buy American.” How much more help from Washington can Detroit afford?






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