Obama says: Buy This New Car --- Without a job

Well, it looks like the new Obama administration is in the car business. According to published reports, President Barack Obama says the federal government is preparing to offer several incentives to get Americans to buy more U.S. made cars.

I don't think the Obama administration gets it. Yes, the Auto Problems are dragging wall street down, but the fact of the matter is milions of people don't have jobs. I Don't get it. How are people going to buy cars, without jobs? We are already struggling with the American Dream. Isn't this exactly what got us into the housing crisis? Americans buying what we can't afford?

The fact is, despite an abundance of rich incentive deals, March vehicle sales for the industry are expected to be lower than March 2007 and even lower than February when automakers report results Tuesday, Edmunds.com has forecast.

March new-vehicle sales, including fleet sales, are expected to total 1.33 million, a 13.2 percent decrease from March 2007 and a 13.9 percent increase from February 2008, according to Edmunds’ forecast on sales figures not adjusted for the difference in selling days.

The forecast is less dreary when adjusted for the difference in selling days. This March had 26 selling days, two fewer than last March 2007. When adjusted for this difference, sales decreased 6.5 percent from March 2007. The bottom line, "Consumers feel there is no compelling reason to buy a car right now," said Jesse Toprak, Edmunds’ executive director of Industry Analysis. Now enter Barack Obama, who seems to ingore the fact that attractive incentive deals were in abundance in March. As reported in Auto Oberver.com automakers have been offering increasingly aggressive incentives on vehicles in slow-selling categories such as minivans, full-size pickup trucks and SUVs. Those deals got even better. For example, Chrysler bumped up the incentives on the Dodge Ram to $5,500 in March.

Also in March, heftier incentives even spread to smaller, lower-priced cars like the Chevrolet Cobalt and Nissan Versa, noted Jessica Caldwell, Edmunds' manager of pricing and industry analysis. Small cars have been hot sellers in the past year, requiring few incentives.

A bunch of lease deals cropped up in March as well.Chrysler, for instance, offered a version of the PT Cruiser with a $99 per month lease payment, while more than 20 other models were offered with monthly payments of $199 or less, Caldwell noted.

"Even Bentley got into the act in March, offering finance deals for 4.99 percent over 60 months," said Caldwell.

AP reports, in a White House speech, Obama said the IRS will start notifying consumers who purchased cars after Feb. 16 that they can deduct the cost of any sales and excise taxes. The program would remain in effect till year's end.

Obama says he wants to work with Congress to use parts of the economic stimulus package to fund a program that would allow consumers to get a "generous credit" when they replace an older, less fuel-efficient car and buy a new, cleaner car.

The president says he wants to make the program retroactive starting Monday. It's meant to boost car sales in the U.S., which have seen their worst decline in 27 years.

Obama also said the government will guarantee warranties on any GM or Chrysler vehicles.

Big Six Outlook
Edmunds.com predicts:

Chrysler will sell 170,000 units in March 2008, down 17.7 percent compared with March 2007 but up 13.4 percent from February 2008. This would result in a new-car market share of 12.8 percent for Chrysler in March 2008, down from 13.5 percent in March 2007 and even at 12.8 percent in February 2008.

Ford will sell 217,000 units in March 2008, down 15.1 percent compared with March 2007 but up 13.5 percent from February 2008. This would result in a new-car market share of 16.3 percent of new-car sales in March 2008 for Ford, down from 16.7 percent in March 2007 and even at 16.3 percent in February 2008.

GM will sell 294,000 units in March 2008, down 15.1 percent compared with March 2007 but up 9.0 percent from February 2008. GM's market share is expected to be 22.1 percent of new-vehicle sales in March 2008, down from 22.6 percent in March 2007 and down from 23.1 percent in February 2008.

Honda will sell 134,000 units in March 2008, down 6.7 percent from March 2007 but up 16.0 percent from February 2008. Honda’s market share is expected to be 10.1 percent in March 2008, up from 9.4 percent in March 2007 and up slightly from 9.9 percent in February 2008.

Nissan will sell 102,000 units in March 2008, down 8.4 percent from March 2007 but up 18.1 percent from February 2008. Nissan's market share is expected to be 7.7 percent in March 2008, up from 7.2 percent in March 2007 and up slightly from 7.4 percent in February 2008.

Toyota will sell 211,000 units in March 2008, down 13.0 percent from March 2007 but up 15.9 percent from February 2008. Toyota's market share is expected to be 15.9 percent in March 2008, up from 15.8 percent in March 2007 and up slightly from 15.6 percent in February 2008.