In 2010 US Government ran a program (C.A.R.S/ cash for clunker) during which consumers turned in gas guzzlers and bought nearly 700,000 more fuel-efficient vehicles in fewer than 30 days. Transaction data is available through NHTSA website.

1. CASE STUDY
CASH - FOR - CLUNKERS
WENYIYAN
WYYWENYI@GMAIL.COM
(408)-858-6259

2. INTRODUCTION
Program: 2009 U.S. “Cash - for - Clunkers”
Encourage to retire old and lower MPG vehicle and purchase higher
MPG vehicle
Duration:
July and August 2009
Objective:
Stimulate U.S. Economy
Put more fuel-efficient cars on the road
Incentive:
$3,500 or $4,500 credit

3. KEY DATA
• Duration:
• 30 days
• Number of Trade-In Vehicles:
• 677,984
• Government spent (incentives):
• $2.8 Billion
• Total sales (MSRP) of New Vehicles:
• $15 Billion (14.42 trillion GDP in 2009) (0.1%GDP)
• National Coverage:
• 55 Areas (50 States + 1 District + 4 Insular areas)

4. QUESTION
 Identify the 10 most successful states and the 10 least
successful states.
 Study the trade-in behavior of west coast consumers
against consumers from other areas.
 Study the behavioral patterns of consumers purchasing
new vehicles.
 Evaluate the conclusion “wildly successful” from
government.

5. METHODOLOGY
• Step 1: calculate the average MPG of trade-in vehicles in each state
(MPG-old)
• Step 2: calculate the average MPG of new vehicles in each state
(MPG-new )
• Step 3: calculate the MPG % increase.
(MPG-new – MPG-old) / MPG-old
• Step 4: sum the total trade-in vehicles in each state
• Step 5: get the total number of registered vehicles in each state (census.gov)
• Step 6: calculate the trade-in coverage ratio in each state
number of trade-in vehicles/ registered vehicles
eg: California
MPG % increase = 66%
Trade-in coverage ratio = 0.22%
Data Point of California CA(66%, 0.22%)

6. METHODOLOGY
Y-Axis: Trade-in Coverage Ratio
origin : ( Avg x, Avg y)
Successful Area
Least Successful Area
X-Axis: MPG % Increase
• 55 areas of data points
• Plot 55 areas of data points in the
quadrant
• X-Axis: MPG % increase
• Y-Axis: Trade-in Coverage Ratio
• Origin:
• Average of MPG % increase in
55 areas
• Average of Trade-in Coverage
Ratio in 55 areas
• First quartile -> best performance
• Third quartile -> worst performance
• Origin (59%, 0.27%)
• California(66%,0.22%)
California (66%, 0.22%)

7. Y- Axis:
Trade-in Coverage Ratio:
Max: 0.60%
Min: 0.01%
Avg: 0.27%
Median: 0.26%
X- Axis:
MPG % Increase:
Max: 66.08%
Min: 51.15%
Avg: 58.57%
Median: 57.73%
Threshold Line:
Slope of Line: K = Δ Y / Δ X
(Max Trade-in - Min Trade-in Ratio)
(Max MPG % - Min MPG %)

8. Successful
States:
Oregon
Colorado
Virginia
Minnesota
Connecticut
Maryland
Rhode Island
Vermont
Maine
New Hampshire
Least Successful
States:
Georgia
South Carolina
Hawaii
South Dakota
Arkansas
Alabama
Alaska
Mississippi
*District of Columbia
Wyoming

9. State Performance by MPG & Trade in
Coverage (Geographic Visualization)

10. State Performance by Sales
Successful States:
California, Texas, New York, Florida, Illinois,
Pennsylvania, Ohio, Michigan, New Jersey,
Virginia
Least Successful States:
*District of Columbia, Wyoming, Alaska,
Montana, Hawaii, North Dakota, Vermont,
South Dakota, Rhode Island, Delaware

11. THE PERFORMANCE OF
WEST COAST CONSUMERS

12. MPG % increase
in West Coast and other areas
*West Coast refers to the states of California, Oregon and Washington.
64.7%
58.2%
54.0%
56.0%
58.0%
60.0%
62.0%
64.0%
66.0%
West Coast Other Areas
% MPG increase
0.076%
0.006%
0.000%
0.010%
0.020%
0.030%
0.040%
0.050%
0.060%
0.070%
0.080%
0.090%
West Coast Other Areas
% Trade in coverage
Trade-in Coverage
in West Coast and other areas
• West Coast consumers purchased more fuel efficient vehicles than other
areas.
• MPG % increase in west coast is higher than other areas by 14%.
• Trade-in ratio coverage in west coast is 11 times grater than other areas.
MPG / Trade-in Ratio

13. • More percentage consumers in other areas switched from trucks to passenger
cars.
81%
63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% truck in Trade-in
Vehicle in West Coast
% truck in New
Vehicle in West Coast
Trucks
86%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% truck in Trade-in
Vehicle in Other
Areas
% truck in New
Vehicle Other
Areas
Trucks
In west coast, there are 81%
trade-in vehicles which are
trucks. In new purchased
vehicles, there are 63% are
trucks.
18% consumers switched from
trucks to passenger cars.
In other area, there are 86%
trade-in vehicles which are
trucks. In new purchased
vehicles, there are 42% are
trucks.
44% of the consumers switched
from trucks to passenger cars.
Type of Vehicles

14. 4%
61%
9%
26%
West Coast
EU Japan Korean US
3%
43%
12%
42%
Other Areas
EU Japan Korean US
• West coast consumers like to buy Japanese brand vehicles than other areas.
• 61% consumers purchased Japanese brand in west coast.
• Consumers in other areas bought more US brand vehicles than west coast.
• 42% consumers purchased US brand in other areas.
Brand of Vehicles

15. BEHAVIORAL PATTERNS OF
PURCHARSING NEW VEHICLES

16. Distribution of count number of Trade-in vehicles by age
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
% of the total
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
0K
10K
20K
30K
40K
50K
60K
70K
80K
90K
100K
110K
120K
130K
140K
150K
160K
170K
180K
190K
200K
210K
220K
230K
240K
250K
260K
270K
280K
290K
300K
310K
320K
330K
340K
350K
360K
370K
380K
390K
400K
Count of Trade In Odometer Reading
Odometer:
Avg: 130,000 miles
Median: 140,000
miles
Cutoff >400K
Year:
Avg: 12
Median: 14
Distribution of count number of Trade-in vehicles by mileage
• Most people choose to buy a new vehicle when their cars are around 12 years old
and 130K miles.
Average years of trade-in vehicle:
12 years
Average mileage of trade -in vehicle:
130,000 miles
Year and Mileage

17. EVALUATE THE CONCLUSION
“WILDLY SUCCESSFUL”

18. EVALUATE
• Government Perspective
• Number of trade-in vehicles
• Program duration
• Survey
• Sample size (21% response)
• Insignificant level
• Question Design
• Incremental sales even without program
• 12% will still purchase vehicles
• Held off purchase in June 2009
• Disposed trade-in vehicles
• Good condition vehicles will be destroyed
• Wheel or tires can’t be reused
• 2 of the top 3 new vehicles are Japanese brands
• Macroeconomic
• GDP
• Unemployment Rate
Purchase Motivation
National Brand Protection
Wasteful Resources
Not a Robust Survey
Sustainable development

19. DATA SOURCE:
C.A.R.S Program data:
http://www.nhtsa.gov/Laws+&+Regulations/CARS+Program+Transaction+Data+and+Rep
orts
VEHICLE REGISTRATIONS DATA:
http://www.census.gov/compendia/statab/cats/transportation/motor_vehicle_registrations_
alternative_fueled_vehicles.html
• Automobiles, trucks, and buses (excludes motorcycles). Excludes vehicles owned by military services.
DATA CLEAN:
51 States (50 states + 1 Washington. DC)
Drop off four States: Guam Northern, Mariana Islands, Puerto Rico, Virgin Islands
(reason: no registrations information in census data)
DATA ANOMALIES
Trade in Odometer reading: 9,999,999, etc.
APPENDIX

20. THANK YOU