Ford Posts First Monthly Sales Increase in 2 Years

CHICAGO – Surging demand from the government's "cash for clunkers" program has helped lift Ford Motor Co. to its first monthly increase in two years, the company's top sales analyst said Sunday.

July sales results mark the first year-over-year gain for Ford since November 2007 and apparently the first uptick by any of the six biggest carmakers since last August, George Pipas said.

He declined to disclose a specific total before sales results are officially reported on Monday. Dearborn, Mich.-based Ford sold a total of 161,071 vehicles in July 2008, down 15 percent from a year earlier.

The increase further testifies to the successful reception of the government rebate program, which President Barack Obama signed into law June 24 as part of a broad $106 billion spending bill.

"We were having a good month — and Ford's been having some good months lately — but the (clunkers) program really put us over the top for sure," Pipas said in a telephone interview.

The government's Car Allowance Rebate System (CARS) was designed to get old, polluting vehicles off the road and scrapped while helping car dealers emerge from the recession. Owners of gas-guzzlers could receive rebates of $3,500 or $4,500 toward the purchase of a new fuel-efficient car. The program proved wildly popular and led to the sale of 250,000 new vehicles in just days.

Transportation Secretary Ray LaHood said Sunday he expects the current $1 billion pool, which had been expected to last until November, to be exhausted by the end of this weekend. The House on Friday approved an additional $2 billion, shifting funds from a renewable energy loan program, and the Obama administration is pressing the Senate to go along before its summer vacation begins at week's end. If the Senate does not approve the additional funding, the progam will have to be suspended.

Improved sales at Ford and elsewhere may be another sign that the economy has either bottomed out or is nearing a bottom. The government reported Friday that the economy shrank at a pace of just 1 percent in the second quarter, better than analysts anticipated and much better than the 6.4 percent decline seen in the first three months of the year, which marked the steepest slide in nearly 30 years.

Pipas said the July sales increase is "some indication that consumers are getting their feet on the ground again. ... I think it indicates that maybe the worst is behind us, sales-wise."

The July sales also make it the ninth month in the last 10 that Ford has posted a gain in market share, he said.

Pipas said that is evidence of the success of the company's new products — the Fusion and the Fusion hybrid, the Escape, the redesigned Focus, the Mercury Mariner and the Mercury Milan — all of them among its most fuel-efficient vehicles.

July auto sales overall are expected to decline about 16 percent year-over-year, according to the automotive Web site Edmunds.com. For the first half of the year, U.S. sales were down 35 percent. But results due out Monday are expected to show that July was 11 percent better than June and the strongest month of the year.

Several analysts are predicting that July sales will exceed an annual rate of 10 million for the first time in 2009, a sign that the economy is starting the modest recovery predicted for the second half of the year.