The big winners in the Cash-for-Clunkers program: Toyota, Honda, and Ford. All three automakers registered solid sales upticks for the month of August, compared to a year ago, likely propelling the auto industry, reports Bloomberg, "to its first monthly gain since October 2007." Ford's August sales grew 17 percent, compared to August 2008
GM and Chrysler, however, continued their slump. GM auto sales were down 20 percent; Chrysler's, 15.
A GM spokesman did his best to put a sunny spin on the numbers, noting that GM's auto sales had risen by 30 percent when compared to July, making August "far and away" the best month of 2009, according to the Detroit Free Press.
But there seems to be little question that the bankruptcy woes of the two American automakers delivered wounds the Cash-for-Clunkers program could not heal, at least not immediately.
The big question now is what happens in September? Now that Cash-for-Clunkers is over, industry analysts are predicting another falloff in sales. The extent of the probable decline will go a long way towards determining whether the program can be judged a success. A dramatic sales fall will bolster the arguments of critics who believed that the Clunkers program failed to provide a real stimulus, but instead just "stole" sales from the future.
Another possibility is that the program might have helped jump-start a new growth cycle by provided a useful boost at just the moment when the economy was most able to take advantage of assistance. On Tuesday, the Institute for Supply Management's manufacturing index broke into positive ground for the first time since January 2008 and pending home sales and residential construction spending also rose. On Friday, we will learn whether July's relatively encouraging unemployment numbers were an outlier or part of a trend. As Congress resumes deliberating after Labor Day, the future of health care reform and climate change legislation may hang on the economic numbers due to arrive in September.