All About Japan Autos

One year has passed since the government initiated Cash for Clunkers, and compared to sales one year ago, the automotive industry isn’t doing so hot. “The entire auto industry knew August sales weren’t going to stack up well compared to last year: after all, the Cash for Clunkers program in August, 2009 lured an astonishing number of even recession-addled consumers into what had been gloomy showrooms for ten months out of the year,” Edmunds states.

Chrysler was the only automaker to see a sales increase — seven percent. However, this increase follows months of slow sales and the company’s bankruptcy last summer. General Motors, Toyota, and Ford are among the companies experiencing the sales slump. Even Hyundai Motor America, which has done well in recent months, saw a drop of 11 percent in August.

The tough month raises new concerns for future hybrid and electric car sales. According to Autoblog, “[Toyota] Prius sales fell 37.5 percent compared to August 2009 and dropped off 16.3 percent compared to the July 2010 numbers.” Cash for Clunkers boosted hybrid sales last year, but this summer’s low gas prices caused consumers to steer clear of the more expensive vehicles.

Autoblog Green explains the sales decrease: “The current national average of $2.68 a gallon for regular is equivalent to an inflation-adjusted $1.01 per gallon in 1980. While that’s certainly good for household budgets in a struggling economy, it doesn’t provide much incentive to buy fuel efficient vehicles at a price premium. With the new Chevrolet Cruze starting at over $16,000 and the soon-to-launch new Ford Focus likely to cost at least that much, high-mpg cars could face a tough road in the market unless fuel prices rise soon.”

The tough news for automakers is that gas prices shouldn’t rise anytime soon. Automotive News says the US government “expects gas prices to continue to drop through September and into the fall. Lower crude prices, higher inventories and relatively weak fuel demand, it seems, are conspiring to keep fuel prices low.”

This news concerns automakers releasing hybrid and electric vehicles later this year. Autoblog Green suggests that although expensive eco-friendly cars like the Nissan Leaf and Chevrolet Volt are entering the market, consumers will avoid the new electric cars to save money even with government tax incentives for hybrid and electric cars.

“For most new-vehicle buyers,” Automotive News writes. “The economics of spending thousands more for a hybrid or electric vehicle vs. a traditional gasoline-powered set of wheels just aren’t going to add up, at least for now.”

If you’re in the market for a gasoline or electric car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.