“Cash For Clunkers” Increases Ford Sales

By Ben Tan — August 3, 2009

Ford’s July auto sales were up 2.3 percent, juiced by the government’s “cash for clunkers” $4,500 credit, the automaker reported.

“Cash for clunkers put us over the top,” said George Pipas, sales analyst for Ford on CNBC.

The short-term government spending program designated $1 billion to pay consumers up to $4,500 for trading in old cars for energy efficient vehicles. Money for the program ran out months earlier than expected, forcing the House to vote for $2 billion more on Friday. The Senate has yet to take up the additional funding request. Obama’s backers say the program proves that the president’s economic plan is correct.

“The so-called cash for clunkers program has actually been far more successful than people expected,” said National Economic Council President Larry Summers, “both in terms of the number of car sales it’s generated, and, I should say, in terms of the environmental benefit.”

Alan Greenspan, former head of the Federal Reserve, gave a thumbs-up to the cash for clunkers program but said yesterday it is popular because the economy is on its way back up, and not because it is stimulative. The program has worked to get people to buy cars and move stock, he said, but Greenspan did not necessarily recommend it as an economic fix.

“It’s an interesting issue,” he said on ABC’s “This Week.”

“I mean, I have qualms about the concept, but there is no doubt that that very extraordinary response is a very important indicator that the state of confidence in the economy is beginning to pick up. If we had been — the clunker program had been put in place six months ago, it would have probably been a dud.”

Ford’s monthly increase marks their first since November 2007. Ford is the first major automaker to report July sales. The automaker believed it would “fall short” of last year’s July sales until the government stimulus kicked in, Pipas said. Sales of Ford’s core brands, Ford, Lincoln, and Mercury, rose by 9 percent according to the report. Diminished fleet sales and other poor-performing brands dragged the overall number down to 2.3 percent.

One thought on ““Cash For Clunkers” Increases Ford Sales”

  1. It’s sort of like stimulus money…I’m not sure giving out a certain amount is going to help out at all. Like you said…short term, maybe. Long term? Not at all.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s