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Who did Cash for Clunkers help?

The Automotive supply chain includes parts suppliers that feed the car makers domestic & global.  Car makers sell to dealers who markup and sell to end consumer.  When financing is needed, banks or Automakers provide financing and then sell the loans as a packaged security on the capital markets.
The capital markets are the most globally distributed of these players followed by the Automakers.  Banks & dealers are the localized players in the system.
Looking at the underlaying dynamics, current and future situation for these cogs in the wheel.

Dealers:They had been sitting on inventory with high financing costs.  They are a volume business that need sales to cover their fixed capital investments and variable sales costs.  This enabled them to clear out a lot of inventory that had been sitting on the lot and adjust to the lower level of sales going forward.  They will see lower volumes as at least 50% of clunkers were cannibalized future sales.  However they did benefit from some portion of buyers that weren't planning to buy and decided to take advantage of a great deal.  They also got "Halo" sales from people who didn't qualify for clunkers like me but who anyway went ahead and bought to fit the little guy and his traveling equipment.  They will still need to adjust to lower sales volumes into the future.

Automakers:Manufacturers were sitting on record levels of inventory, since they did not cut production fast enough in response demand falling off the Lehman building.  This allowed them to liquidate their inventory and actually start production at significantly lowered levels.  This did help the Japanese manufacturers more than domestic as seen in the July Auto Imports (Up $2.4B). The clunker programs in Europe, Japan also added additional sales to help liquidate this inventory.  They are still sitting on significant fixed assets and debt incurred for them that demand high levels of sales to meet their interest obligations.  They are starting to heal but the competitive landscape is changing and more consolidation can be expected in the lower sales environment.

Banks: The credit profile of this cohort of auto borrowers are much better than previous subprime years.  It maybe that they did not take out as much financing as they would have in say 2006.  The interest rates that the banks and Automotive Credit companies (GMAC, TMCC) are getting right now means that these were profitable loans to make.  This also raises the credit quality of their overall loan book.  However, given the lack of securitization they are taking higher risks than they would in years gone by, but this should be manageable given they are actually paying attention to borrower credit now.

Wall Street & Securitization: The TALF program has seen some deals announced to securitize auto loans ($6-9B).  They will see some fees from these deals.  The volume and the horrific global PR of the subprime fallout will mean that there will be much less money made this time around.  The risks are going to be scrutiinized a lot more meaning that prices maybe lower as well.