And the Clunkers trade-in new car sales winner is?

There’s good news and bad news about the government’s Car Allowance Rebate System (CARS) or “cash for clunkers” program, depending on your point of view.

First, after months of debate that started last January in Congress — as China and European countries went ahead with their own Clunkers programs — the U.S. version officially got under way in late July. CARS immediately increased vehicles sales by at least 250,000 units or more. When the first $1 billion in taxpayer funding evaporated in about a week, Congress took $2 billion from another auto technology program to keep CARS rolling. That cash is now apparently gone, or will be by September.

An announcement could come as early as today that the program’s $3,500 to $4,500 rebates are over, but we’re guessing  that the Obama administration will face the same problem that automakers have historically had with rebates – once cash handouts are in place they are almost impossible to remove as buyers simply wait for the next round of rebates or stay out of the market. We’ll see how this plays out in the depressed economy.

Meanwhile, without question, the program is wildly successful at boosting auto sales. New vehicle retail sales in August are now forecasted to cross the 1-million-unit mark for the first time in the past 12 months, according to J.D. Power and Associates, which gathers real-time transaction data from more than 10,000 dealerships across the United States.

Based on the first 13 selling days of the month, retail sales for the month of August are expected to come in at slightly more than 1 million units, up nearly 2% from one year ago. This marks the first increase in retail sales volume since June of 2007.

“Improved consumer confidence and credit availability during the past six months have combined with the CARS program to lift industry sales out of their slumping year-to-date levels, which have been down approximately 35% year-over-year,” said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates.

The bad news? Since automakers have cut back production so much this year, dealers are out of vehicles, particularly small fuel-efficient cars. And if this was a program designed to help domestic automakers, it appears that only Ford Motor Company has been given much of a boost so far. Most of the sales have gone to off-shore brands. Here’s the top ten: Toyota Corolla, Honda Civic, Ford Focus ,Toyota Camry , Toyota Prius, Hyundai Elantra, Ford Escape , Honda Fit,  Nissan Versa and the  Honda CR-V 4WD.

Still, a stimulus is a stimulus. However, it appears GM, in particular, was not well prepared for the program. Dealers, who are invoiced by the makers as a vehicle leaves the factory gates, are strapped for cash. General Motors, belatedly, announced this morning that it will begin providing cash advances to dealers which are equivalent to the amount of federal rebates. This follows an announcement yesterday by GM’s New York dealers that they were pulling out of the Clunkers program since payments from the government were not forthcoming as fast as they need to stay afloat.

“Our sales performance in the past two months has exceeded our internal forecast by over 60,000 vehicles, largely driven by the CARS stimulus program,” said Mark LaNeve, VP of U.S. Sales.

Well, yes, but why didn’t GM anticipate this issue? Where’s the speedy decision making promised by CEO Fritz Peterson?

Well, one company did get out in front of Clunkers, Korean-based Hyundai deserves kudos for seizing the day. It had a program in place at the beginning of  July that advanced cash to dealers taking Clunkers trades.

If you been  following Marty’s Marketing Minutia  column here, you’ll know this is only the latest in a series of marketing successes from Hyundai. Domestic makers have long been  accused of just selling the deal as their core and sole marketing philosophy. GM for one is clearly being out-marketed by newer companies.