Is a brighter day dawning?Is a brighter day dawning? Automakers have been restarting factories and adding extra shifts to build more cars to refill depleted dealers inventories.
Many analysts were expecting a gradual recovery in auto sales beginning this summer, even before the Cash for Clunkers plan was announced. Those expectations remain.
"Improved consumer confidence and credit availability during the past six months have combined with the CARS program to lift industry sales out of their slumping year-to-date levels, which have been down approximately 35% year-over-year," said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates, in a statement.
J.D. Power had been forecasting a late-year lift in sales and still predicts that now.
"Reduced inventories will likely hold back some of this momentum, but the automakers are moving quickly to ramp up production and rebuild stock," Dilts said.
AutoNation, the country's largest auto dealership chain, also predicts a gradual recovery in sales and thinks the Clunkers program will help boost that recovery.
"We really think that this is just going to help the gradual recovery we're going to have in the second half of the year," said AutoNation spokesman Mark Cannon.
Beyond the Monday night closing time, the program has still left consumers with the sense that "it's OK to buy a car now," Cannon said.
"The main question now is 'How fast can everybody restock their inventories?'" he said.
Once that happens, Anwyl of Edmunds.com said he expects car prices to fall quickly. Automakers will need to start adding incentives again to get people to buy all those newly minted cars. Anwyl expects incentives of about $3,000 on average.
"I would wait until probably November," Anwyl said.