Posted on 04/20/2020 9:54:28 AM PDT by SunkenCiv
Adam Jonas covers the auto industry for Morgan Stanley. Barron's spoke with Jonas recently about how the car industry can survive the shutdown, and how it might be left changed. His edited comments follow...
We don't think the [car makers] are going to fail the way some did back in 2008 and 2009. But the industry is going to need support. We expect a cash for clunkers program to be much larger in scope and longer in duration than what we saw. In 2008 and 2009, we saw a $3 billion package that stimulated about $14 billion of purchases...
These are numbers more for discussion: a $5,000 coupon to scrap a car subject to a variety of criteria, including U.S. local content percentages, call it 60% U.S. content. So there's an American domestic angle that will of course include Japanese and Korean cars produced in the U.S. There may be some household income limitations and then limitations on the kind of vehicle you can scrap, and then how much you can buy. It might have a $60,000 maximum price limitation. It's going to be designed, we think, to support lower and middle income classes to get bipartisan support.
Also, there will be a fuel economy and a sustainability angle to it. The fuel economy of the car bought, we suspect, will be 50% better than the fuel economy of the car scrapped. By getting rid of those old clunkers, you're getting rid of the least efficient cars on the road, too. And then there's a safety element to it -- some level of minimum driving assistance technology -- so the car you're scrapping versus the car you're buying has a lifesaving element to it, which would get some support...
(Excerpt) Read more at barrons.com ...
I’m absolutely keeping my 30 year old car (Corvette)!
If I thought this was a go, I'd swing down the street and nab a used car for under $3000, *any* used car that I thought would qualify, but it's a gamble, and by the time I'd be more sure of this, the prices of all clunkers would suddenly spike, leaving me with the clunker I like, the one I drive, the only car around here. :^(
The other problem is, I don't want to go into debt (even if I thought I could get a loan, which I probably can't right now) to buy a brand new vehicle with the $5000 off the sticker price (no other deals will be forthcoming).
After the last CASH FOR CLUNKERS deal, my now ex-wife traded off my 2003 Nissan Sentra, that I had given her in the divorce and had been my commuter car and that I paid $7,800 brand new, and got $9,200 trade in value.
I’ll keep my jalopy project jeeps and blazer.
the definition of insanity is trying the same failed thing over and over and expecting a new result
Socialism doesn’;t work, cash for clunkers doesn’t work- the cash for clunkers fiasco was a colossal failure-
Agreed. Wife has an ‘09 Camry bought new, 225,000 miles on it. Last year my kid traded in an 06’ Camry I gave her. Bought it in ‘07 with 14,100 miles on it. It had 265,000 when she traded it in for $1500. The only non-routine maintenance were 2 water pumps on the ‘06, a top motor mount on the ‘09. Maybe $600 total for all 3 repairs. Prior to the these, wife and I owned a Ford, an Olds, a Saturn, a Chevy, a Buick. All bought new or a year or 2 old. Not one of them got anywhere near 100,000 miles without repeated, expensive repairs. I will never buy another American car.
The last time, the poor could not afford a decent vehicle because of that program. Most of the good, secondary market cars were ruined.
Getting financing for a car loan, with or without this stim package, could wind up being difficult, since there have been a lot of lets-not-pay-our-bills whoop-di-doo going on with this BS shutdown.
You could have had her hit for five.
The point of cash for clunkers wasn't to help society, so it was a rousing success. ;^)
She definitely wasn’t worth. I joked that I used the cash for clunkers to get rid of her
No cup holders??!!
they touted as a stimulus effort for the hurting economy- that and the ignorant ‘shovel ready jobs’ that never panned out either
NO!!! HELL NO!!!
“No cup holders??!!”
Complex, breakdown-prone technology :)
“I will not have any newer than about 1980.”
Points, plugs, cap, rotor, condenser every 15k miles?
AND NO cupholder?
Masochist!
(2004 Honda CR-V, 318k miles. Replaced A/C compressor (2x), starter motor, plugs every 100+k}
Don’t do this really stupid thing. Last time around there were no affordable starter cars & the younger generation really took it on the chin.
There is always someone figuring out a way to rip of the tax payer with every government program. The next door neighbor started up a part time car repair business & couldn’t find the engine # for the obama era car someone brought in. It had to be a re-engined clunker.
The last time I had any interest in buying a new car was 1973.
Lotus Europa JPS.
Currently there are NONE available that I would accept even if they were free!
Overly and needlessly complex, made of plastic, and loaded up with unwanted “Features” to pad the price.
Maybe, just maybe, Gov. Org. will realize that manufacturers need to be allowed to offer basic transport again.
Not everyone needs or wants a luxury car/SUV.
It seems all the criminal political schemes are feeding on the Corona totalitarians.
Buying used cars with my money so you can smash them?
“Its for the industry”
WTF am I going to buy a new car with BOZO? You spent my money smashing my old one after you took away my Job!
Indeed in three months most won’t even remember the virus.
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