Unintended Consequences For Clunkers
I love it when I see a story or hear an anecdote that leaves me scratching my head wondering if there really was a different expected outcome. The story from the NY Times which has the final numbers on the “Cash For Clunkers” program elucidates a dirty little secret.
One of my investments, CarWoo, had the story about a month ago. My buddy, and CEO, spent the weekend going around to dealers in the San Francisco area talking to dealers about CarWoo and how they might work together. He put together a blog post with some observations from the weekend, and pointedly discussed the fact that the American dealers were empty and the foreign dealers were booming.
The fact that the top 10 cars traded in for the program were all American comes as little surprise. American spent years gorging themselves on SUVs and other fuel inefficient cars. Further, the quality of American product has been lagging (at least in terms of the perception of the buyer, which is all that matters) that of the Japanese manufacturers. They are seen as bad product with poor gas mileage. Exactly the type of car you wouldn’t be looking to buy if someone were trying to incent you to buy otherwise.
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