WSJ: Next for Auto Sector, Post-Clunker Hangover

Washington DC September 1, 2009; The AIADA newsletter reported that the federal Cash for Clunkers program pushed auto sales to their highest levels in over a year, analysts estimate. But, according to the Wall Street Journal, the boost is likely temporary and some anticipate falloff. Even within August, the numbers point to a pullback.

On a weekly basis, dealers sold cars at an annualized rate of over 19 million in the first week of the clunkers program, followed by weeks of car sales at rates of 12 million or more, according to estimates by Edmunds.com.

In the final week of August, after the program ended, sales slumped to eight million. The Clunkers program also caused unintended consequences, such as some higher car prices and lower levels of supply.

Dealers raised their prices on Toyota Corollas, for example, by approximately $445 while the clunkers program was in effect, according to Edmunds.com.

That could help send some car sales downward in coming months. To read more from the WSJ on the sales forecast for the U.S. auto industry in the coming months, click here.