Ford Posts First Sales Gain Since 2007 on ‘Clunkers’
By Mike Ramsey
Aug. 2 (Bloomberg) -- Ford Motor Co. said U.S. sales rose in July, the first monthly gain from a year earlier since 2007, as buyers took advantage of the government’s “cash-for- clunkers” incentives.
U.S. industry sales probably ran at an annualized rate of more than 10 million units last month for the highest level of 2009, George Pipas, Ford’s sales analyst, said today in an interview. He wouldn’t give details of July results before an announcement set for tomorrow.
Ford’s increase was due chiefly to the so-called clunkers program, which offers credits of as much $4,500 for trading in older models and buying cars and light trucks with better fuel economy, said Ken Czubay, the automaker’s U.S. sales and marketing chief.
“Retail vehicles are up for the first time since the financial crisis began,” Czubay said in an interview, using the industry term for autos bought by consumers. Those sales are more profitable than fleet purchases by businesses.
Ford, the second-largest U.S. automaker, sold 156,406 vehicles in July 2008. The Dearborn, Michigan-based company hadn’t posted a monthly sales increase over a year earlier since November 2007, Pipas said.
Pipas said Ford also improved its U.S. market share in July, extending its gains after the company became the only domestic automaker to avoid filing for bankruptcy.
Market Share
Ford increased its U.S. market share in June to 17 percent from 14 percent a year earlier, climbing past Toyota Motor Corp. and into second place behind General Motors Co. The company has said it has achieved those improvements while reducing its use of incentives.
“It’s a continuation of what Ford has been working on for the last year -- gaining better-quality market share,” said Michael Robinet, an analyst with consultant CSM Worldwide Inc. in Northville, Michigan.
The federal Car Allowance Rebate System generated a burst of new-vehicle demand, and buyers used up most of the $1 billion in available funding in less than a week. The U.S. House of Representatives approved $2 billion more on July 31, and the White House said the program will continue until the Senate takes up the measure this week.
Industrywide Sales
U.S. sales have languished at an annual rate of less than 10 million vehicles since December and have fallen for 21 consecutive months, damped by a lack of credit, tumbling housing prices and the recession.
Pipas said the industry’s seasonally adjusted sales rate in July would easily exceed the 10 million level. That prediction suggests that the average estimate of 10.1 million among 7 analysts surveyed by Bloomberg may have been too low.
Ford’s sales were projected to drop 6.1 percent, based on 6 estimates, while the decline was estimated at 24 percent for GM and 33 percent at Chrysler Group LLC.
Sales matching or exceeding analysts’ estimates may signal a possible bottom in the worst U.S. auto slump since at least 1976. Automakers sold 13.2 million vehicles last year, and averaged 16.8 million from 2000 through 2007.
The Wall Street Journal reported Ford’s sales gain earlier.
Separately, Chrysler’s $4,500 rebate offer on top of the clunker program’s incentive will end on Aug. 4, to be replaced by cash offers that vary in size depending on the vehicle purchases, the Journal reported.
The promotion drove traffic to dealerships and sales increased, the Journal said, citing a Chrysler spokeswoman, Jodi Tinson.
“There will be some adjustments in incentives,” Kathy Graham, another spokeswoman, told Bloomberg News. She said the changes aren’t final yet.
To contact the reporter on this story: Mike Ramsey in Southfield, Michigan at mramsey6@bloomberg.net
Last Updated: August 2, 2009 16:44 EDT
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