We know that U.S. auto sales crashed in September, after August's Cash-for-Clunkers-fueled buying frenzy fizzled out. The dramatic reversal lent credence to the claims of critics who had argued from the outset that the only thing Cash for Clunkers would achieve would be to "steal" sales from the future.
But writing for The Oil Drum, Morgan Downey crunches the numbers and comes up with a more hopeful interpretation of Cash for Clunkers' impact.
First he notes that, even if the stimulative effect of Cash for Clunkers is in doubt, there seems to be little question that the program did change what kinds of cars Americans have been buying.
The clunkers program achieved what US$147 per barrel could not: 57 percent of vehicles sold during August 2009 were cars rather than SUVs/Light trucks. This exceeded the 55 percent number of May08-July08 as oil prices hit record highs.
And this change in consumer preference, argues Morgan, isn't transitory.
What is most interesting is that the share of car sales has not collapsed to pre-clunker program levels: in September 2009 car sales accounted for 54 percent of total US sales.
It would be dangerous to generalize too much based on one month of data, particularly when that month was one of the worst months for auto sales in decades in the United States. But the trend does bear watching. Let's see what happens in October.