Although, depending on supply and demand, these new vehicles may be sold at above or below the MSRP, higher prices from factory to dealer, generally higher MSRP’s, lack of desirable product and the subtly important fact of a reduced number of new franchised dealers portend higher prices for the consumer and may compromise the upswing in sales.

The bankruptcies of GM and Chrysler may have given those manufacturers new life (at least for the time being), but it came at a cost to many good dealers who were unfairly put out of business, with the predictable result that there will be less competition at the retail level, which will work against consumers overall.

Will fewer choices of where to shop for a new car and the planned increases in pricing slow or stop the fragile recovery now underway for automotive manfacturers?

Then, news breaks this morning that GM (the new one) is attempting to curtail the use of the ubiquitous nickname “Chevy,” by virtue of a leaked memo to its Chevrolet employees renouncing the casual moniker and requiring the formal Chevrolet be substituted in all communications immediately. Well, it’s not shutting down production of a brand, but it has the same feel, doesn’t it? The following conversations that are still rocketing around the world on the internet plead for the culturally-favored “Chevy” and tout its widespread use in the vernacular.

Wait a minute. Didn’t both these breaking news stories just boost the popularity and attention on the names of these two automotive icons? Could this be a cynical ploy to raise the visibility of these two product lines by setting up the gallows and proclaiming a public execution? “Oh, no, not our beloved…”

We don’t know for sure. But we’ve seen all manner of things in the last twelve months that seemed unbelievable. Are these?

Mike Colleran of Saab Cars North America agrees in the piece that appealing to Saab loyalists may be the first priority in healing the brand’s wounds, which grew during a six month “no supply” period that the 218 dealers were anxious to end. AN also reports that Saab will return to leasing after it finishes a financing agreement with GMAC Financial Services. This is necessary for inventory uptake in the face of two years of sharp sales drops (35 percent in 2008, 59 percent in 2009).

We wish a rejuvenated Saab the best of luck in this uncertain economic environment.

Of course, the shock wave began several years ago, when we sadly said good-bye to Oldsmobile.

Now, invested dealers, and consumers, have or will take a hit with the discontinuance of Hummer, Saturn, Pontiac, possibly Saab and others not far behind.

The only good news (and it’s not much) is that most states have statutory provisions that require a manufacturer to provide continued parts and service support to the dealer ( for the benefit of the consumer) of the discontinued line-make, for a period of time. In Virginia, that support is required for at least five years from the date of discontinuance.

What else could be done?

Although there was an anticipated drop off after the conclusion of the program, it did allow for needed cash flow, and depletion of inventory. The sell off of inventory allowed the factories to fire up, again, putting more prospective buyers back to work.

The drop off in sales at the conclusion of C4C was due, in part, they tell us, to the perception that the “same “deals” were not available, and that there was limited selection of vehicles left at the dealerships.

However, dealer clients report that it took only a month or so to get fresh vehicles back on the lot and, further, that many of the C4C buyers were folks the dealers had never seen before– many likely first time new car buyers.

The deals are plentiful again, and so is the automobile inventory. The lingering concern is over consumer economics, including jobs and funding for the new car purchasers, which have not returned to the necessary levels to fuel the recovery.

Do you see any signs that the recent sales levels in the car business are a possible light at the end of the economic tunnel?

Following on the heels of the cash tied up in the C. A. R. S. (Cash for Clunkers) program, this means serious troubles for new car buyers. With less money available for replacing inventory and a new model year rolling out, there could be a lot of empty spaces on the car lot.

Even large, typically well-funded dealers, could be affected. For the larger new car dealers, the slow DOT payments from the C4C exacerbates the problem. For smaller and independent (used) car dealers, many former financing sources shut down in the last year, and many other banks and financing sources still have not loosened purse strings, in spite of “stimulus” dollars received.

What more could the SBA do to get money flowing to dealers?

The program was a success because it gave a shot in the arm to a troubled industry, reduced inventories of many models of new cars and trucks which, in turn, led to the firing up of factories. The express purpose, although overshadowed by the economic effect, was to benefit the environment by swapping more efficient and less polluting new vehicles for older vehicles, which should occur to some less quantifiable degree.

C4C was (and continues to be) a beneficial, but frustrating experience for new car dealers, and has demonstrated again that government agencies do not run as efficiently as private enterprises.

Another unsurprising result is that the program has created a shortage of older used cars and driven up the price for used vehicles, generally. Some say that the program only brought buyers to the table that would have appeared later in the year, anyway. Im my mind, it’s more likely that the suggested uptake of buyers will have only a small impact because the program sold off mostly 2009 models. The new 2010 models will bring the usual buyers looking for something new or different…and the timing of what appears to be the beginning of an economic turnaround can only help.

How about your company? What will you do to sustain the weak momentum heading into the new model year?

We know that, initially, some of that was due to omissions by dealers rushing the vouchers through. In other cases, there was a “failure of communication”, which amounts to dealers having trouble with the lengthy and sometimes confusing rules for submitting claims.

The big, and continuing problem we hear reported by our dealer clients is that even those good claims submitted as early as July 27, still remain unpaid, and continue to be listed as “under review.” One dealer is reported to be waiting on close to one million dollars– that is a lot of inventory out the door, with no voucher compensation from the government.

This, in addition to the lack of inventory at dealerships, due to the initial success of sales through the program, is contributing to what appears to be a cooling off of customer interest.

We all hope the NHTSA can get the cash flowing to dealers as quickly as Congress authorized the additional incentives last week.

This is great news for consumers and new motor vehicle dealers, who have seen the first sales uptick in July in almost two years. Of course, the A.R.R.A. and T.A.R.P. programs which lubricate the credit markets are essential to the momentum of the automotive market.

Our clients are relieved. The “C4C” initiative, which aims to trade off the rebates for a booster shot for new car dealers and the manufacturers, as well as promotes fuel-efficiency, is a rising tide that floats all boats. Dealers still in business get the cash injection and have a market for their static inventory. In fact, some are running low on key models. In turn, manufacturers get to gear up again and, perhaps, call some workers back to factories idled in the spring.

The main things we like about the program are its speed, accountability, and stimulation of a chain reaction. Would that the bailout programs had done such a quick and visible job among our banks and other lenders!

What about you? Do you think the economic stimulus is having a positive effect on the business and consumer climates? What will it take to get the lenders doing what they are supposed to do?

I’ve been talking to our dealer clients about it and they report real sales activity due to this finanical incentive program that encourages consumers to convert lower gas mileage automobiles and light trucks to higher gas mileage ones with a cash program that lowers the purchase price of the new vehicle. As one of the only stimulus programs that has worked quickly, and is accomplishing the intended purpose, this effort needs to continue at least to the end of the original period.

Apparently, Congress believes this as well, because the House has already approved diverting funds from those intended for energy loans to the “cash for clunkers” effort to keep it running through October. Today, it is before the Senate, and dealers like my clients are hoping that they approve the additional $2 billion to keep this economic package rolling.