Edmunds.com being strong armed after claiming Cash 4 Clunkers cost $24,000/car

[MasterXan]

The facts in the case of the White House versus Edmunds are essentially indisputable – but they are open for interpretation. The federal government's $3 billion Cash for Clunkers program generated 690,000 sales by providing $3,500 and $4,500 vouchers to car buyers who turned in their eligible car or truck in exchange for a more fuel efficient ride. From here on in, Edmunds and the White House seem to be at considerable odds.

Edmunds recently claimed that its statistical analysis shows that only 125,000 of the nearly 700,000 vehicles purchased under C4C were sales that wouldn't have come in 2009 if it weren't for the much ballyhooed government program. And since the program cost $3 billion to implement, Edmunds came to the conclusion that each incremental sale achieved by C4C cost taxpayers $24,000 per vehicle. As you might imagine, the White House has a problem with that.

The White House starts its quite literally otherworldly retort by noting that that motor vehicle sales increased America's overall economic growth in the third quarter by 1.7%. That's the industry's largest contribution to that metric in over a decade. The WH blog post then states that Edmunds is ignoring the assertion that overall car sales were also positively affected by the Clunkers program above and beyond the 690,000 C4C units sold. To add insult to assault, the White House accuses Edmunds of covering auto sales on Mars.

While the government doesn't have hard facts here, anecdotal evidence certainly shows that August's seasonally adjusted annual rate (SAAR) of 14 million cars and trucks sold means there were considerably more sales generated by C4C than the 125,000 number would suggest. The WH blog also notes that analysts from Global Insight and Moody's suggest that there has been little payback from the Clunkers program.

The White House also states that C4C will have benefits beyond the third quarter, as production has been bumped at Chrysler, General Motors, Ford and Honda in the fourth quarter. That should mean that GDP will get still another big shot in the arm from the auto industry. The White House then goes on to add that C4C generated 70,000 jobs. We're tempted to call shenanigans on that one, especially considering that divvying up $3 billion between 70,000 jobs only comes out to $42,857 per – and that doesn't account for the actual cars themselves.

Edmunds CEO Jeremy Anwyl took time to respond to the suddenly hostile situation, arguing that government subsidy programs are always expensive when looked at on a per-unit basis. Edmunds adds that it is strictly working with the facts to come up with the $24,000 per vehicle number, and that anecdotal evidence like indirect sales isn't based on concrete data.

http://www.autoblog.com/2009/10/30/empire-strikes-back-white-house-calls-out-edmunds-on-clunkers-s/6#comments

wow destroying things sure is expensive. :lol:
Edmund's CEO responds on Kudlow (http://www.youtube.com/watch?v=Q5nhQ-iC66A)

is Edmunds a reputable site anymore since they criticized this program? are they the arm of the Hyundai or Ford? lol

[CaptSmethwick]

This is not the sort of conclusion that Edmunds can make by solely examining existing data. Sales data - historical and present - can, however, help them formulate an hypothesis (not a conclusion) that they could then test. IOW, had Edmunds said that the C4C program may have costed up to $24k per car, they'd IMO, though, that test would require a survey of those who actually purchased cars under the C4C program.

Just add this one to a long list of headline-grabbing press release touting lazy-a$$ed research. A release seemingly at odds with this release of less than 3 months ago:


"There is no question that the program [Cash for Clunkers] has generated results. The shopping activity we've witnessed has generated a SAAR of 19.6 million, remarkable compared with the industry's sales record of 17.4 million set in 2000," noted Edmunds.com Senior Analyst Jessica Caldwell. "Of course, this level of activity will not continue, as it reflects the behavior of those anxious and able to participate in the program — and that is a limited set of people."

In the months just before Cash for Clunkers launched, 39 percent of new car sales involved a trade-in. Since then, 51 percent do. Prior to the program, nearly 9 percent of trade-ins were vehicles that would have qualified as "clunkers." Since the launch, 39 percent of trade-ins qualify.