Ford Sales Strengthen, Automaker to Increase Production

Citing better-than-expected sales and traffic at dealerships, Ford Motor Co. said Monday it plans to increase third-quarter production by 25,000 units, marking the automaker's second production hike in recent weeks.

Ford spokesman Mark Truby said that will bring total quarterly production to 485,000 units, a year-over-year increase of 16 percent or 67,000 units. Last month the company said it would raise third-quarter production by 42,000 units.

The boost affects all models of Ford, Lincoln, Mercury vehicles, with more emphasis being placed on Mustangs, pickup trucks and the Ford Focus compact car, Truby said.

"We had pretty well lowered production in recent quarters to meet demand," Truby said. "Now as we're seeing market share increases and showroom activity, we're ramping up production to meet that demand."

The increase comes as Ford's top sales analyst, George Pipas, said the company's June sales were "good" compared with the overall industry. The Dearborn, Mich.-based automaker could see a year-over-year decline of 10 to 20 percent, which could be the lowest among all major automakers, he said.

"This will be our lowest decline of this year," Pipas added.

Automakers, which are due to report June U.S. sales on Wednesday, have seen sales fall 37 percent over the first five months of the year. Pipas said U.S. auto sales may have halted their month-to-month declines in June and could be down less than 30 percent for the first time since September of last year.

As bad as it sounds, a decline of less than 30 percent could be a welcome relief, as automakers and suppliers have trimmed production and other costs to adjust to lower consumer sales.

"The important takeaway is that we're not going backward, we're not slipping back," said Pipas during a sales preview talk with reporters. "It suggests the worst is behind us, not just the economy, but we may have seen the low point for the year."

Pipas said individual regions of the country are showing sales improvements compared with June 2008, another sign that the auto market has bottomed out and is recovering. While sales in the Great Lakes states are improving, they're still slow in California and Florida, two areas hit hard by the decline in the housing market, Pipas said.

Pipas joined other industry analysts in predicting that June sales could surpass a 10 million seasonally-adjusted annual selling rate for the first time this year.

Last week J.D. Power and Associates predicted that automakers would sell 914,400 vehicles in June, 26 percent less than in June of last year and 1 percent lower than the 924,064 sold in May.

Pipas said May typically is a stronger sales month than June, but he was unsure if this June would surpass May figures.

He said federal "cash for clunkers" legislation recently signed into law could boost sales later in the year, and noted that consumer confidence is improving, suggesting that the worst is over with the economy and auto sales.

Shares for Ford rose 3 percent, or 17 cents, to close Monday at $5.78.

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