WASHINGTON – Recent actions by a government agency, which were reported by USA Today, could mean the $3 billion Cash for Clunker’s program is entering the enforcement phase.

On Sunday, the newspaper reported that the National Highway Traffic Safety Administration (NHTSA) is investigating at least 20 dealerships it claims violated the rules of last year’s Cash for Clunkers program. Quoting government auditors, the report said that up to $94 million in rebates may be ineligible because they lack the proper documentation.

A NHTSA spokesperson told the newspaper that there’s no evidence of widespread fraud and said the violations are a small fraction of the 18,915 dealers who participated in the rebate program, which attracted 678,418 new-car buyers.

In a report issued last April, Joseph W. Comé, assistant inspector general with the U.S. Department of Transportation, said 3.3 percent of the claims it reviewed, or about $94 million in rebates, were missing paperwork.

“We project that almost 22,000 transactions lacked supporting documentation, such as proof of insurance, in the CARS database at the time of our audit,” he wrote.

He added that some of those transactions his office reviewed could ultimately prove to meet the program’s requirements with additional paperwork, which NHTSA confirmed through its own review.

ST. LOUIS – Comprehensive consumer research released by Maritz Automotive Research Group demonstrates that the Cash for Clunkers program succeeded in creating significantly more incremental sales than previously estimated without negatively impacting future automotive sales.

The research findings provide strong evidence that Cash for Clunkers spurred consumers to buy or lease new, fuel-efficient automobiles without sacrificing future car or truck sales. Like previous National Highway Traffic Safety Administration (NHTSA) data that demonstrated CARS increased jobs and reduced greenhouse gases, these sales numbers are a solid indication that Cash for Clunkers achieved its objectives.

“Our findings not only provide strong evidence that many more vehicles were sold as a direct result of the incentive program than were previously estimated, but they also largely debunk the myth that Cash for Clunkers mortgaged future car and truck sales,” said Vice President Dave Fish, PhD. “In fact, the program resulted in sales of vehicles to people who don’t normally buy them.”

Using its New Vehicle Customer Study (NVCS), which is conducted year round, Maritz surveyed nearly 36,000 consumers who bought a new car or truck during the implementation of the Car Allowance Rebate System (CARS) from July to August 2009.

The NVCS findings show that the Cash for Clunkers program created 542,000 incremental new car or truck sales, meaning that those auto buyers and lessees would not have existed without the incentive program. Previous estimates put resulting incremental sales at somewhere between 125,000 and 346,000.

Maritz’ analysis reveals that of consumers acquiring a new vehicle (CARS and Non-CARS participants) in July and August 2009:

• Only four percent of participants in the CARS program would have still purchased or leased a vehicle without the extra incentive.
• Thirty-one percent took advantage of the incentive rebate specifically because of the CARS program.
• Thirteen percent intended to take advantage of the incentive but did not qualify.
•  About half (52 percent) did not participate in CARS and never intended to.

According to government records published on www.CARS.gov, 677,000 vehicles qualified as CARS transactions. The Maritz study demonstrates that the vast majority (542,000) of consumers indicated that CARS was the main motivation for purchasing or leasing a vehicle when they did. Moreover, an estimated additional 223,000 vehicles sold during July and August 2009 were purchased by consumers who wanted to participate in CARS, but did not qualify, yet they purchased or leased a new vehicle anyway.

“The ‘halo sales’ of 223,000 vehicles were an added bonus to the already solid results produced by the CARS program,” Fish said.

The Maritz study also debunks concerns that CARS was mortgaging the future by stealing sales that would have occurred anyway at a later date. While experiencing a slight dip in sales in September 2009, most likely due to a shortage of auto dealer inventory, the Seasonally Adjusted Annual Rate (SAAR) from October through December 2009 shows that automobiles continued to sell at a higher pace than before the CARS program was implemented, according to statistics from the U.S. Department of Commerce’s Bureau of Economic Analysis.

Maritz’ NVCS also shows that Cash for Clunkers did not attract the “normal” new car buyer, but an unorthodox pool of consumers, including many used car owners, first-time car buyers, consumers who were trading in cars with more than 100,000 miles and buyers adding an additional vehicle to their family fleet. More specifically:

• Typical CARS program buyers were more often first time new buyers (16%) than typical new car buyers (12%).
• CARS buyers were more often adding to their household fleet (31%) than non-CARS buyers (22%).
• More than 60 percent of consumers who bought a vehicle under the CARS program plan on driving their vehicles as long as possible, rather than replacing them every few years. This compares with 38 percent of non-CARS participants.
• Fifty-eight percent of CARS participants were trading in vehicles they originally purchased used (versus 28% for non-CARS participants).
• Nearly 80 percent of all trade-ins had more than 100,000 miles.
• Half of trade-ins were more than 10 years old.

“These results provide strong empirical evidence that CARS did not impede future sales. Vehicles were sold to people who don’t normally buy them,” Fish concluded.

WASHINGTON – Japan’s embassy has announced that the country will open its “cash for clunkers” program to Detroit’s Big Three automakers, reported The Detroit News.

The Japanese Embassy, under heavy pressure from Congress, defended its program as nondiscriminatory but agreed to let Detroit’s Big Three take part. The three automakers use special import rules to sell a small number of vehicles in Japan.

Critics of the Japanese program say that while U.S. vehicles had been shut out of Japan’s “clunkers” program. Japanese brands grabbed 319,300 out of a total of 677,000 in sales in the $3 billion U.S. “cash for clunkers” program last year.

The emissions standards have yet to be set for American vehicles in the Japanese program, and not all will qualify. U.S. companies opt to use a set of rules that doesn’t require the same emissions testing as the Japanese.

WASHINGTON – A group of 40 House Democrats — part of the New Democrat Coalition — wrote a letter Friday to the Japanese ambassador to the United States, Ichiro Fujisaki, calling for the country to allow U.S. manufacturers to participate in Japan’s “cash for clunkers” program, while Congress is planning two hearings on the issue in the coming weeks, reported The Detroit News.

Japan’s program is set to expire March 31, and the Japanese Diet — the country’s legislature — is considering extending it.

The Japanese government has rejected criticism that its $3.7 billion program unfairly excludes Detroit automakers.

A House Energy and Commerce subcommittee chaired by Rep. Bart Stupak, D-Menominee, is planning to hold a hearing on the Japanese program on Jan. 26. The witness list hasn’t been finalized for the hearing.

Another hearing is planned for Jan. 21 on barriers to U.S. auto imports in Japan and South Korea by a House Ways and Means subcommittee.

Washington – The Japanese government has rejected criticism that its $3.7 billion “cash for clunkers” program unfairly excludes Detroit’s Big Three automakers, reported The Detroit News.

Satoshi Miura, a consular official in the Japanese Embassy in Washington who handles auto issues, said U.S. manufacturers could participate if they followed the same import rules as many others. Instead, U.S. companies opt to use a set of rules that doesn’t require the same emissions testing.

“The short answer is Japan believes that our program is fair,” Miura said today. “We have our ‘cash for clunkers’ program, but this is not only about stimulus but also for environmental policy.

“Any car can enjoy this program as long as they satisfy the same fuel efficiency standards, regardless if it is domestic or imported.” Miura said 43 percent of imported vehicles qualify for the program in Japan.

In a letter to the deputy U.S. trade representative Thursday, General Motors Co., Ford Motor Co. and Chrysler Group LLC called the program “another example of Japan continuing efforts to discriminate against imported vehicles.”

The program makes “the vast majority of imports ineligible for the program’s significant tax cut benefit, regardless of the vehicle’s fuel efficiency,” the letter said.

Japan is providing up to a ¥250,000 ($2,830) tax cut for scrapping a car 13 years old or older toward the purchase of a new vehicle as long as it meets the 2010 fuel efficiency requirements and a ¥100,000 ($1,130) incentive for new vehicle purchasers who do not scrap a vehicle.

Under Japan’s program, no U.S. vehicles are eligible because of special import rules; 87 percent of Japanese-built vehicles are eligible. But the Japanese government noted that program is voluntary, and U.S. manufacturers can qualify if they use the same import guidelines that other companies use.

Domestic automakers have long railed over what they call unfair hurdles to selling vehicles in Japan and have been trying to get more access to the market. It’s unclear how much a favorable change would boost U.S. exports to Japan.

Consumer credit patterns returned to their status quo in September, with interest rates, loan terms and loan-to-value ratios reverting to their pre-Cash for Clunkers (C4C) levels, according to the Federal Reserve’s monthly report.

The loan-to-value ratio, which fell to 86 percent in August during C4C, rebounded to 91 percent in September.

The amount financed increased from $24,405 in August to $30,380 in September. Year-to-date, this was the highest level for amount financed for new-car loans.

Additionally, interest rates decreased from 4.06 in August to 3.5 in September, which is more closely aligned with the July figure of 3.43 percent. Loan lengths increased slightly from 61.8 months in August to 63.6 months in September.