Clunkers help Ford boost sales 2%; first increase in 19 months
Ford dealers, like this one in Los Angeles, have seen sales jump thanks, in part, to demand generated by the federal cash for clunkers program.
In so doing, Ford outpaced other automakers, which appeared to benefit from the trade-in stimulus, but not to the same degree, the Los Angeles Times reports. Honda Motor Co., for example, said its sales declined 17 percent in July. That’s still a marked improvement over previous months — year to date Honda is off more than 30% — but still far behind Ford’s results.
Other automakers, including General Motors Co. and Toyota Motor Corp., are expected to report results later today.
For July, Ford sold 158,838 cars and light trucks, a 2 percent increase in new vehicle sales that broke a streak of 19 monthly declines. Ford said it was seeing a slight uptick in sales before the clunkers program officially opened on July 24, but that they greatly increased thereafter. The program, which offers rebates of $3,500 and $4,500 to consumers who trade in older autos for new vehicles that meet certain fuel economy standards, has been hugely popular.
Ford leaked news of its sales increase over the weekend, and its shares opened strong today, rising 53 cents, or 6.6 percent, to $8.53.
“The consumer response to cash for clunkers is the story for the month and understandably so,” said Emily Kolinski Morris, chief economist at Ford. “The program seems to be living up to its promise.”
The fate of the $1 billion program is currently up in the air. Because of the strong response, government officials are concerned that the money will run out in a matter of days. The House voted last week to appropriate an additional $2 billion for the program, but the Senate still needs to vote on the measure.
Speaking on MSNBC today, Transportation Secretary Ray LaHood said he was confident that the Senate would pass the additional funding. “We’re encouraging senators to listen to their car dealers and the people they represent. If they do that, it will pass the Senate,” he said.
Although Ford’s sales were up, there is little expectation that the industry as a whole will show a sales gain once all July numbers are reported.
The last time U.S. auto sales overall notched a monthly increase was October 2007, and through June of this year, the industry was running roughly 30% below its 2008 levels.
Click here for the Los Angeles Times story.
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