Clunker cash on last lap

“Cash for Clunkers” may end Monday, but there’s still plenty of mileage left in the Car Allowance Rebate System (CARS) story.

The U.S. Department of Transportation (DOT) said late Thursday that it will shut down the auto-rebate program after this weekend, with dealers on an 8 p.m. Monday deadline to submit applications. The CARS program, which had originally been expected to last through October, faced unexpected demand and earlier was augmented with an extra $2 billion in funding.

Here’s the DOT’s Thursday press release , and here’s a fact sheet about the "orderly wind down" the agency is hoping for.

Dealers are being urged to focus on paperwork vs. sales over the next few days. The DOT says it’s reviewed about 150,000 CARS deals out of an estimated 450,000-plus eligible transactions. It’s got extra staffers on hand to process applications and held a Webinar earlier this week to reiterate rules to auto retailers.

While the DOT clearly doesn’t want a tidal wave of new buyers to hit showrooms today, you might want to serve your readers by getting a Web story up ASAP reiterating deadlines and rules, as well as what paperwork they’ll need to make a last-minute deal and take advantage of rebates up to $4,500. For background and other resources, check out this earlier tipsheet on the clunkers rebates.

Then, head out to showrooms and set up your weekend or Monday stories. Are dealers in your area awash in claim forms? Will they be holding an all-hands-on-deck marathon paperwork session this weekend, or clocking out as usual? What glitches are they experiencing? How’s traffic on the lots, and which models are moving?

For biz features, get creative with video and audio – cars and engines are natural subjects, especially on a late-summer weekend. If you ferret out the right car owner – one with lots of family snapshots and a knack for storytelling – you could even produce a montage of one clunker’s rise and fall. Maybe it’s my Motor City ties, but whenever a truckload of those crushed cars wheels past, I muse that every single cube of scrap once was someone’s brand-new pride and joy.

Now, here’s a description of dealership workers performing automotive euthanasia. Footage of some cast-off having its engine deliberately seized – juxtaposed with photos from its heyday -- would be informative and poignant.

Getting back to biz: Try for a sit-down with retailers’ general managers and financial officers. What has the CARS program meant to their sales and profits? Do they worry about the oft-repeated claim that it’s merely siphoned demand from the rest of the year? What else do they have in the pipeline to capitalize on momentum and remain viable?

Come back to "Your Daily Tipsheet" each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

All Eyes on Automakers

Monthly U.S. auto sales tallies are always closely watched, but Monday’s numbers will be especially interesting because they’ll reflect a full week of sales under the federal "cash for clunkers" program.

Automotive sales, of course, have spent the past year in a free fall, sending General Motors and Chrysler to bankruptcy court and Capitol Hill for concessions. Thousands of workers have been furloughed, bought out, retired early or laid off.

Here’s how drastic the drop has been: In 2007, U.S. consumers wheeled away in some 16 million new cars trucks. This year, the most upbeat forecasters predict total sales of – maybe – 10 million vehicles. That’s nearly a 40 percent drop in two years – meaning 40 percent less revenue for pretty much the entire supply chain and everyone connected with auto retailers.

So even if you don’t have a car company headquarters or factory in your territory, chances are a good number of your readers have a vested industry in the health of the auto industry.(After all, as taxpayers they now own a majority stake in GM!)

The automakers – including the U.S. units of transplant and overseas companies, report monthly sales a day or two after the last business session of the previous month. Autodata Corp., an information service for the industry, posts the release calendar and year-to-date figures free of charge on its Web site.

The June tally is up now; take a look to make sure you understand the terminology. First you’ll see the year-over-year results – last June compared to this June, in raw numbers and in percentage-point change. (Those are the negative numbers in the third column, for most brands.) The next three columns are cumulative sales year-to-date, compared to the same period in 2008.

You also should understand SAAR – that is, the seasonally adjusted annual rate of sales, a measure of how many cars could be expected to sell in a year if the pace of the current month continues.

Autodata also provides an aggregated spreadsheet at the end of the day to some media outlets; the reports are a valuable shortcut in creating charts and info boxes. The firm has been inundated of late with media requests and might switch to a paid subscription, so don’t put away your calculator just yet. Meanwhile, a polite request to media@motorintelligence.com may just get you a coveted spot on their distribution list.

Another way to prep: Check out the company-by-company forecasts by industry watchers such as Edmunds.com; while not infallible, these predictions can help you get a feel for the story-du-jour in auto sales. Sometimes it’s external forces like the current rebate program; other months it’s the horse race for the No. 1 position or the dive in truck and SUV demand.

Individual company releases (sign up for them at individual automaker media Web sites or via PR Newswire – and do it today, not Monday) come in no particular order and trickle out after noon on the appointed date – leaving you the morning free to troll dealerships for retailer and consumer comments.

Check around today to see if you can sit in on (and video) the closing of a new-car deal Monday morning; hearing the voice of a consumer who decided to take the plunge – and the reasoning behind his or her purchase – will add quite a bit of human interest to what can seem like a dry numbers story. With billions of taxpayer dollars and hundreds of thousands of jobs at stake, car sales reports these days are anything but routine.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.