Once Cash for Clunkers was finished, September auto sales plummeted.

Later in the month of August, car dealers and manufacturers participated in Cash for Clunkers and the program was a success because it got a lot of gas guzzling cars off the highways and it helped some citizens be able to get a new car that they may have not otherwise been able to afford.

However, now U.S. auto sales have fallen by 23% for the month of September. The two automakers that were hit the hardest was GM and Chrysler. GM’s sales dropped by 45% and Chrysler’s plunged by 42% for the month.

Ford even saw sales decline. However, while Ford’s United States counterparts dropped by staggering amounts, Ford managed to hold its decline to 5% from the previous year.

Automakers knew that the cash for clunkers success wasn’t meant to last and they had actually prepared for the steep decline in sales. There were plenty of analysts who were predicting that sales would take a tumble for the month of September.

It wasn’t only US automakers that faced a fall in sales, Japanese automakers also faced declining sales for September. Honda’s sales fell 20% for September and Toyota and Nissan fell 13% and 7% respectively.

There was a bright light in all the sales declines; Hyundai Motor Company’s, the Korean brand that offers pretty reliable cars at a low price, sales increased by 27% for September. Hyundai (when combined with Kia, its affiliate) is now the sixth largest automaker in the United States auto market. It has overtaken Nissan this year for the first time. This can likely be attributed to Hyundai’s cars having appealing price tags.

Along with the analysts, I knew this was going to happen. Cash for clunkers was a good program if you were looking in the short run, but the people who were out buying the cars weren’t exactly the kind of people that you can expect to come back and buy another new car in 5 or fewer years. Most of the people who took advantage of the cash for clunkers program are the kinds of people who hold on to a car (even if it is being held together by duct tape) for years and years longer than the more frequent car buyers do. I can see how it was good to have the, even as temporary as it was, jump in sales, but in the long run those won’t be sustained sales and the company will have to do something to get more people in the doors.

There is not a huge chance that automakers will be able to offer similar deals to the cash for clunkers program on their own to get people in the door to buy a new car. Chris even brought home a flyer that offers an incentive for a Ford automobile due to a partnership through work and the incentives were just not as good as the now-ended government run program.

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