'Cash for clunkers' boosts Ford's July sales 1.6%

DETROIT -- Ford Motor said Monday that July sales rose nearly 1.6% over the same month last year as the government's wildly successful "cash-for-clunkers" program gave the automaker a significant boost.

The company said it sold 158,354 light vehicles in July, compared with 155,866 vehicles in July 2008.

Ford attributed its July sales rise to the clunkers program, which offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, if they scrap their old vehicle.

Other automakers, which report sales later Monday, are expecting a boost from the program as well. Subaru of America said it expects a 30% sales increase.

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, Ford's George Pipas said.

The increase further testifies to the successful reception of the government rebate program, which President 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.

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 program 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% in the second quarter, better than analysts anticipated and much better than the 6.4% decline seen in the first three months of the year, which marked the steepest slide in nearly 30 years.