SEMA comes out against Cash For Clunkers. Again.
Reiterating their position from last December, SEMA has issued a statement against the ever-more-likely "Cash for Clunkers" proposal. This proposal, which would give Americans a financial incentive to get rid of older vehicles in favor of new models, could give incentives of $3,000 to $5,000 to scrap vehicles that are at least eight years old and buy a new car that gets at least 27 mpg on the highway (24 mpg for trucks). SEMA, the Specialty Equipment Market Association, joins the Automotive Aftermarket Industry Association (AAIA) in taking their opposition public. Here's their reasoning.
SEMA and the AAIA basically say that there are tremendous downsides to the Obama Administration's plan. SEMA says that taxpayer dollars would be wasted "on a program that may produce an artificial spike in sales, but does not reduce emissions or increase fuel efficiency." SEMA also warns that the program will be "misused by those who own two or three older cars and seek to take advantage of the taxpayer give-away. Many of these cars aren't frequently driven, if at all, so destroying them will not clean the nation's air or make us less dependent on foreign oil." The AAIA puts the whole thing even more bluntly: Cash for Clunkers "will harm the environment, negatively impact car owners, waste billions of taxpayer dollars and hurt the hundreds of thousands of vehicle service and repair businesses in America."The AAIA represents 100,000 repair shops, parts stores and distribution outlets while SEMA has 7,358 member companies. It doesn't take a genius to realize that both of these organizations benefit from having older cars that are no longer covered by warranty on the roads. SEMA says that the government's proposal will "hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country."
The AAIA recently tried to fight the bill by saying that landfills would be stuffed to the gills with scrapped cars if it becomes law. Of course, 84 percent of cars (by weight) are recycled and 95 percent of vehicles go through the recycling process in the U.S. There are other, environmental reasons to oppose the proposal: tremendous amounts of energy and resources are required to build new cars, for example. And, without a requirement of a mpg increase from the scrapped vehicle (not just the stated minimums for the new vehicles), the Cash for Clunkers program won't necessarily have a huge impact on greening the nationwide fleet. But the government is interested in stimulating sales right now, and scrappage programs like this do work.
[Source: Specialty Equipment Market Association, Automotive Aftermarket Industry Association / Photo: dave_7, CC2]
PRESS RELEASES:
Administration Cash for Clunkers Proposal Bad for Consumers & Environment
Trade Association Cautions Against Creating Another Home Mortgage Debacle
BETHESDA, Md., March 30 /PRNewswire-USNewswire/ -- While the Automotive Aftermarket Industry Association (AAIA) supports efforts by the Obama administration to help stabilize U.S.-based vehicle manufacturers, the association cautions that the "Cash for Clunkers" proposal will harm the environment, negatively impact car owners, waste billions of taxpayer dollars and hurt the hundreds of thousands of vehicle service and repair businesses in America.
AAIA strongly opposes the use of Cash for Clunkers programs, which threaten jobs in the independent aftermarket industry by removing repair opportunities for vehicles and raising the cost of used cars and parts.
"It seems arrogant to destroy perfectly good vehicles with many more years of useful life just to entice consumers to purchase a car that they might not be able to afford," said Kathleen Schmatz, AAIA president and CEO. "This is hauntingly reminiscent to the home mortgage debacle when consumers purchased homes they could not afford."
Cash for Clunkers would prematurely destroy vehicles and their valuable parts and components, denying more affordable used vehicles and parts to millions of low and middle income families who cannot afford to purchase a new car even with a $3,000 to $5,000 government voucher.
About AAIA
AAIA is a Bethesda, Md.-based association whose more than 23,000 members and affiliates manufacture, distribute and sell motor vehicle parts, accessories, service, tool, equipment, materials and supplies. Through its membership, AAIA represents more than 100,000 repair shops, parts stores and distribution outlets.
SEMA Press Statement Re: Cash for Clunkers
WASHINGTON, March 30 /PRNewswire/ -- The Specialty Equipment Market Association (SEMA) applauds efforts to help consumers, automakers and dealerships with a program to stimulate new car sales. We support the concept of government-issued vouchers toward the purchase of fuel-efficient new vehicles and allowing consumers to deduct the car interest payments on their taxes.
However, SEMA continues to oppose tying these vouchers to vehicle scrappage programs, known as "cash for clunkers." The programs accelerate the demise of older vehicles, which are then typically crushed into blocks of sheet metal. Scrappage programs focus on a car's age rather than how much it is driven or its actual emissions. SEMA has consistently warned against wasting taxpayer dollars on a program that may produce an artificial spike in sales, but does not reduce emissions or increase fuel efficiency.
Automakers and dealers need to sell cars in order to survive, but potential buyers have hit the brakes in these tough economic times. Scrappage programs actually would deny vouchers to the majority of people who may want to buy a new car but don't have an eligible older car to trade. Instead, these programs will be misused by those who own two or three older cars and seek to take advantage of the taxpayer give-away. Many of these cars aren't frequently driven, if at all, so destroying them will not clean the nation's air or make us less dependent on foreign oil.
While supporters tout a similar German program as evidence of success, the European Federation for Transport and the Environment, (the pan-European federation of environmental groups), has urged Germany and other countries to abandon scrappage subsidies because they do more environmental harm than good by artificially accelerating the car life cycle.
Scrappage programs hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country. This industry provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenues. We encourage the President to help the entire auto industry with programs that focus the incentive where it counts - on the purchase of new vehicles and not destroying older cars.
ABOUT SEMA:
SEMA represents the $38.1 billion specialty automotive industry. Founded in 1963, the trade association has 7,358 member companies. It is the authoritative source of research data, trends and market growth information for automakers and the specialty auto products industry. The industry provides appearance, performance, comfort, convenience and technology products for passenger cars, minivans, trucks, SUVs, crossovers and recreational vehicles. For more information, contact SEMA at 1575 S. Valley Vista Dr., Diamond Bar, CA, 91765-3914; call 909/396-0289; or visit www.sema.org or www.enjoythedrive.com.
Reader Comments (Page 1 of 1)
Richard in FLA 2:43PM (4/02/2009)
It seams to me that a compromise could be made. The incentive to scrap the old cars would stay, but the govt would sell the cars, without title, to the scrap yards to maintain the older cars that aren't scrapped. Can anyone think of any minuses to this model of business?
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polo 2:51PM (4/02/2009)
The dirty polluters could still be put back on the road, meaning you've negated any environmental benefit of replacing the old car with a more efficient one.
Richard in FLA 4:11PM (4/02/2009)
How many would still be put on the road? They don't have any titles, unless they use a title form another "dead" car which case it's a wash. The benefits outweigh the negatives.
polo 2:52PM (4/02/2009)
WHO CARES. They represent REPAIR SHOPS, which obviously would be the biggest losers if old clunkers got replaced.
Their argument that buying new cars won't increase fuel efficiency is idiotic. From all the proposals I've seen, the requirements would mandate that the new vehicle replacing the old one have better fuel efficiency. And even with the emissions used to produce new cars factored in (a disingenuous argument in itself) the new cars would still be more efficient than many old gas/oil hogs.
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jeffzekas 2:50PM (4/02/2009)
Okay, here's the deal: giving me $3000 to buy a new car will have ABSOLUTELY NO EFFECT on my decision to restore my 1968 Galaxie! Okay, SEMA?!!
NO ONE -- I repeat: NO ONE -- will scrap their '68 Camaro or stop fixing up their old sports cars or classic sedans.
NO --- ONE. Got it?
So, SEMA, stopped opposing a bill which will allow me to buy a new, fuel efficient automobile for my college-age son!
Thank you.
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GoodCheer 3:39PM (4/02/2009)
I couldn't agree more. If your car is not worth $3000, you're probably not spending any money on keeping it in tip-top shape anyway.
A Concerned Citizen 3:04PM (4/02/2009)
It is interesting to think that many people who make performance modifications to cars (SEMA) and those who service old cars (AIAA) are the very people that cannot afford, or simple choose not to buy a new one. One of my favorite cars is the 87' 300zx Shrio Special sitting in my garage right now. It's probably worth 4k to sell but I wouldn't, and 5k towards the purchase of something new but not as loved no way. Parts will be replaced as necessary and life goes on. If AIAA and SEMA are so concerned about people having a better opportunity to replace their clunker, then it is quite rudimentary to assume that their markets have been overinflated. How many people driving an 83' Reliant K will be financially able to qualify for a brand new car with 4-5k off sticker? Isn't that pretty much already available from desperate manufacturers? Does their survival truly rely that heavily on the general population's misfortune?
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Woodenbee 4:01PM (4/02/2009)
well all i know is it ruins my day if I get stuck behind a smokey car, that should be the focus, why not have nationwide emissions testing, in my state they eliminated the pathetic auto "inspection" altogether several years ago and then added that fee of $5 to the registration fee, and put all the inspection stations out of business, nice Job Republican governor! always lookin out for the regular joe, NOT!!!!!!!!!! anyway I'd be happier knowing emissions was being monitored and that would create jobs and money for auto repair places, then if your car failed they could get the credit to replace the car, or repair it. of Course that would be wide open to all kinds of corruption that is now the standard thanks to the leadership model we've had for the last eight years, its permeated every transaction from buying a house to selling a stock
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Free_Thinker 11:39AM (4/03/2009)
SEMA doesn't want people to "stop buying new cars." Of course SEMA wants the car companies to survive and prosper.
The danger is in reducing the driving lifecycle of the AVERAGE CAR, your daily driver, to the point that there will be NO incentive to maintain it. After eight years, consumers will begin to EXPECT a handout for their, ehem, "clunker?" Auto parts stores and repair service centers, other than oil change only shops, will be forced out of business.
You'll have no choice other than a dealership to do any other maintenance. How is a monopoly like that good for you, the consumer?
The point is that that is ALREADY a FREE-MARKET system in place to address old cars that is MORE ENERGY EFFICIENT than this bill. People trade in their old Nissan Stanza or Chevy Cavalier and replace it with a newer car. Then some teenager or low-income family buys the old one. The cycle continues until the car is useless and RECYCLED.
And let's be clear: it takes MORE energy to increase the rate of car production to keep up with the shorter lifecycle. MORE AND MORE ENERGY to keep producing MORE and MORE new cars, just to decrease the age of the fleet? How is that good for the environment.
Try paying off your car and MAINTAINING it for 3-4 years WITHOUT a car payment. The consumer is not obligated to keep making car payment to keep capitalism alive. Then you'll money to spend on your house, your family, vacations, paying of your credit cards, making investments. Now THAT would boost our economy.
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ROCK WEB MEDIA 11:32AM (6/22/2009)
I don't qualify because my car already gets good gas mileage. But my dad swears by the car buying process here:
http://excarsalesman.typepad.com
I have a feeling dealers are going to automatically increase prices because of the increased demand (artificial) for great MPG cars. So the thousands of savings from this bill for consumers is not entirely accurate.
With the price increase, I'm certain some markets you'll come out even as if they never offered this voucher. It is poorly written legislation.
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Dave Krispinsky 12:40PM (6/26/2009)
How about the people who drive their pre-1984 cars?
I drive my 1979 Pontiac Bonneville everyday getting 15 mpg. It has been registered and insured in NY State for the last 20 years. I wanted to buy a new Honda Civic that gets 29 mpg. But since SEMA and AAIA is screwing me in that I am not eligible for the $4500 (my Pontiac is older than 25 years), I will continue to drive my Bonneville everyday and pollute the environment and burn up 2X the gasoline compared to the Honda Civic that I am NOT going to buy.
NICE GOING, FOLKS!
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Jim Eye 8:31AM (7/01/2009)
This ligislation may have originally been intended to help "the little guy", but it has morphed, through massive lobbying by SEMA & AAIA, with copious amounts of money to select legislators and committees, into a real "piece of work" that benefits a very select few.
I agree with Dave K.: How about the people that drive pre-1984 cars? Although it *is* about the people - who in large part probably couldn't afford a NEW bottom-of-the-line Chevy Cobalt w/ no A/C, or qualify for a loan - it's also about the vehicle(s) that pollute at levels far exceeding those of post 1984 production.
With any luck, after this program has run it's July 23 - September 30 course, legislators will realize the inadequacy of the legislation and modify it for the remaining or projected (or hopeful) $3bn and 10 months of the program. OR ... maybe our lovely congressmen and women will see that throwing good money after bad is actually a waste of resources, especially when the program doesn't reach the intended audience.
The fact that this legislation was attached to a "war bill" and not one of many environmental bills that are winding their way through congress speaks volumns! Inotherwords, the bill could not stand alone and be passed.
I've written all three of my congressmen, as well as the president, to air my increasing dismay and concerns about the bill. I still have hope that our lawmakers might enhance this legislation ... but realizing the 'error of their ways' is not one of their best qualities, so I'm not holding my breath.
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Paulo Nardini 7:25AM (7/19/2009)
I am not american, but as i do see U.S. as a example of a respectfull cowntry to it's citizens I am very sad with this and other atitudes of Obama's government.
I never thought that America would take such a ineffective stupid action like this. (other cowntries that did it before, completely fail in theirs purposes).
It's an action that do increases the new car sales in the short term (and it's done just for it --- environmental speeches are just misleading LIES). But, in the long term it completely fails! Because the demand is just one.
If the people buys their new cars today, they will not buy it tomorrow... until the new car became old.
Soo... it's an action that have a HUGE cost (environmental and economical) with the results of just shifting the sales to the present. It does not contribute to U.S. competitiviness in any way... actually it does the contrary!
Cash for Clunkers is a big LIE! It goes in the opposite direction of respecting the citizens and it's rights.
http://www.fightcashforclunkers.org/
PS: Sorry for my defective english. I'm trying to improve it!
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