How's That Cash-for-Clunkers Deal Working?

By Megan McArdle

Cash for Clunkers moved a bunch of auto sales forward, causing people who thought they might replace their car in the next year or two to rush into the showrooms.  Now, in the aftermath, sales are plummeting:  47% at GM, 44% at Chrysler, 8.9% at Ford, 16% at Toyota, 23% at Honda, 11% at Nissan.  I hope those car companies used the cash infusion now, because they'll be on lean rations for months, even years.

The huge slide for our bankrupt giants is interesting.  I mean, we expect sales to fall; the companies are hosed.  But why was Cash for Clunkers particularly good for GM and Chrysler?  Or did they simply use up more inventory than their competitors, since they're shutting down production lines?

This article available online at:

http://www.theatlantic.com/business/archive/2009/10/hows-that-cash-for-clunkers-deal-working/27629/