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Thursday, August 6, 2009

Cash For Clunkers

Here are the top ten trade-ins;
1)1998 Ford Explorer
2)1997 Ford Explorer
3)1996 Ford Explorer
4)1999 Ford Explorer
5)Jeep Grand Cherokee
6)Jeep Cherokee
7)1995 Ford Explorer
8)1994 Ford Explorer
9)1997 Ford Windstar
10)1999 Dodge Caravan

And here is what they bought with their cash and trade-in;
1)Ford Focus
2)Honda Civic
3)Toyota Corolla
4)Toyota Prius
5)Ford Escape
6)Toyota Camry
7)Dodge Caliber
8)Hyundai Elantra
9)Honda Fit
10)Chevy Cobalt

Two easy conclusion; Ford has certainly learned the lesson of the market for improved mileage. The second is much more worrisome. Where are all the high quality Chevrolets that Fritz the new CEO said that GM now makes??

And remember that we now own GM. What do you think are the chances that our investment in GM will ever pay off?

But hang on, it gets worse. Yesterday, the government gave out $2.4 Billion in grants to develop electric vehicles. On the face of it, that is a good thing. As we said in our book, The Great Recession Conspiracy, we are in a long term trend to replace petroleum with electricity as a power source. However, GM got $146 Million of that money while Ford got only $30 Million. And what is GM going to spend that money on? The Chevy Volt! A years away from production car with a projected cost of $40,000!

When will the insanity end???

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