Cash for Clunkers infused $1 billion into car shoppers’ hands at the end of July 2009, boosting overall sales numbers for nearly every automaker during one of the industry’s worst periods in recent history.
We wrote a number of times during the program that sales of inexpensive cars did well because folks were looking for the best deal. Inexpensive cars also tend to be small cars. Fast-forward to July 2010, and sales numbers were significantly higher than the government-incentivized numbers of July 2009. If that isn’t a sign of recovery, the uptick in sales of more expensive non-luxury and family cars should be.
The best example of this boost can be found in family-friendly vehicles like crossovers and even minivans. Honda saw sales overall fall from last year, mainly because its big sellers Accord and Civic took hits, down 17.9% and 25.5%, respectively. The small Fit was also down 29.8%, but the Odyssey minivan and Pilot SUV saw big spikes of 37.8% and 45.4%, respectively despite starting prices around $27,000.
Honda’s not the lone example. Ford’s inexpensive Focus compact car sold especially well during Cash for Clunkers but saw sales fall 29.4%. But sales of the Ford Edge and Explorer SUVs rose 18.9% and 53.2%, respectively despite redesigns of both heading to dealers later this year.
At GM, sales of its remaining brands were up 24.6%, and its inexpensive cars didn’t see as big a hit as others, with the Chevy Aveo and Chevy Cobalt down 14.6% and 22.2%, respectively. Chevy’s nearly $30,000 Traverse crossover saw sales jump 49.1%, and its more expensive siblings, the GMC Acadia and Buick Enclave, also saw sales go up slightly.
More families buying new, more expensive vehicles might signal that the middle class feels more secure this summer than last in terms of the economy and making large purchases. We have already seen the luxury car market rebound. Perhaps now main street is feeling more secure.