Cash for Clunkers Produces July Sales Increase for Ford
By Michelle Krebs August 2, 2009Ford Motor Co. will announce Monday a year-over-year sales increase for July, thanks to the
government's cash for clunkers program. It will be Ford's first year-to-year sales increase since November 2007.
The Car Allowance Rebate System (CARS) is expected cash for clunkers pushed the Seasonally Adjusted Sales Rate (SAAR) to well above 11 million vehicles sold to as high as 13 million, the highest level this year by a long shot.
July's SAAR will be 11 million to 12 million "for sure," Ford's sales chief George Pipas told AutoObserver.com in a phone interview Sunday. "The increase is a nice proof point of the progress Ford has made but being the first of the Big Six automakers to post an increase may be a sign that the consumer is a little more optimistic."
The only other automaker to give an advance hint of sales is Subaru, which said Friday its July sales also will show a year-over-year increase. Subaru, nonetheless, has bucked the industry's downward trend more than any automaker.
An Explorer for a Focus
The cash for clunkers has been particularly good for Ford. Pipas said the automaker, which has been making progress in sales and market share, had not expected the year-over-year increase at the start of July, but cash for clunkers accelerated that milestone. Ford's July sales performance came on the strength of retail sales; fleet sales were down from July 2008, Pipas said.
The government reports 1990's vintage Explorers, mostly V8-powered, have been among the most traded-in clunkers, and the 4-cylinder Ford Focus has been at or near the top for vehicles purchased under the program.
Aside from Focus, other Ford models that had strong July sales were the Fusion, Escape (especially 4-cylinder versions), Ford's hybrid models (Fusion and Escape hybrid) and the compact Ranger pickup, Pipas said, adding the Mercury versions of those models also did well.
"The program did all the right things," said Pipas, not only in stimulating car sales but in having an impact on the environment. "We found out what consumers want to buy if they get a little help -- smaller, fuel-efficient vehicles. I don't know what the government has ever done to achieve the kind of energy savings it has in even one week of the program."
By Ford's calculations, the number of vehicles traded under the clunker program and the fuel-economy savings gained by getting clunkers like the Explorer off the road and replaced by cleaner fuel-sippers like the Focus amounts to about 3 million barrels of crude oil a year. "And we think that's conservative," said Pipas.
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