Ford’s Sales to Rise

DETROIT (Reuters) — Ford Motor Co. will report its U.S. sales for July rose from a year ago on a late-month surge under the federal government’s “Cash for Clunkers” incentive program, senior U.S. executives said Sunday.

The July increase marks Ford’s first year-over-year monthly rise since November 2007, just before the U.S. economic downturn began, and the first increase for any of the largest automakers since the start of the financial crisis a year ago.

The result is “important to Ford, but it is also a very good indication for the economy,” Ford U.S. sales chief Ken Czubay said in a telephone interview.


30 Responses to “Ford’s Sales to Rise”

  1. 1 Abby August 2, 2009 at 10:38 PM

    Perhaps this is a sign that US automakers will begin to recover soon, but Ford was also the only US automaker that did not undergo federal restructuring, so we’ll have to wait to see how GM fares. Essentially, I don’t think too much credit should be given to the federal Cash for Clunkers program specifically for Ford’s success, because while it did increase consumer spending on Ford autos, it was the initial Ford business plan to produce and market hybrids and fuel-efficient cars that ultimately resulted in stronger sales. Chief sales analyst George Pipas said, “You are going to see large gains in almost every Ford product that is powered by a four-cylinder engine — the Focus, the Fusion, Fusion Hybrid, the Escape small utility and its hybrid version, the companion Mercury products — that is where the demand was, particularly this past week.” Hopefully, the sales success of Ford’s fuel-efficient vehicles will spur Ford other American automakers to continue to invest in alternative-energy source cars and more environmentally sound technology. In the end,the financial incentive of greener cars will prevail over American auto brand identity of big, powerful, gas-guzzling trucks…hopefully!

  2. 2 Alejandro Cortez August 3, 2009 at 12:43 AM

    I have to agree with Abby. It is obvious that the demand for fuel-efficient cars is not only rising, but is slowly manifesting into new economic niche. The number of eco-friendly products is growing and producers are scrambling to push the innovative frontiers to create environmentally friendly and efficient products: cars, paints, home insulation, computers, building materials, energy. The list is growing and companies like Ford are slowly realizing this. While I do not believe that an environmental and social/economic equilibrium can exists in a Free-Market (Capitalist) economy, it is a small comfort to know that even a company like Ford is realizing that wasteful and inefficient products are no longer being tolerated.

  3. 3 Carolyne Abrams August 3, 2009 at 7:13 AM

    I don’t think there is a question of whether or not the hike in Ford sales is due to the Cash for Clunkers program or not. Of course it is. So far the Cash for Clunkers aka CARS has allocated $1 billion dollars towards the program with a possibility of another $2 billion to come. With the first billion allocated, it allowed approximately 225,000 cars to be passed through the system and the funds are getting sucked up very quickly. The program was designed to boost car sales as well as get gas-guzzlers off the road and it does look like it has achieved its goal. There are car dealerships that are actually running out of new cars. That would be unimaginable just a few weeks ago.
    Was it worth a billion (possibly a total of $3 billion)? If it is going to save the auto production industry, I would say it is very worth it. For any of the three major auto industries to go under would cause a catastrophic unemployment rate within our country.

  4. 4 Jessie Maguire August 3, 2009 at 9:12 AM

    This cash for clunkers policy has been one of the most positive things that the government has done for American car companies. The 1 billion dollar budget was gone in six days! That means that people are ready and willing to become more efficient and conscious. It also means that we as a country, with more people driving energy efficient cars, will be somewhat less dependent on oil. I hope that the additional 2 billion dollars is passed to keep this program going!

  5. 5 Lauren Swartz August 3, 2009 at 9:44 AM

    It’s great to hear that the stimulative effects of the “cash for clunkers” program are making an impact. And it’s also a pleasant suprise that a United States based automaker can boast such benefits, as the program was not limited to American manufacturers. But I think it’s unlikely that the sweeping changes in American oil consumption touted in the above pasts will take place based on the program as participants could received their rebate for trading up to a newer model car that only improved their gas milage by 4 miles per gallon. Not that signifigant.

    I think it’s important to look at this program in terms of its ability to stimulte the economy and specifically the auto industry, in which it was quite successful. While I certainly hope Americans can make a shift towards more fuel efficient vehicles I don’t foresee this program being the impetus for a nationwide change or a great reduction in our demand for oil.

  6. 6 James Dugger August 3, 2009 at 11:04 AM

    I know I tend to be negative, but I’m going to wait to come to the conclusion that the program is indeed working. It’s good for Ford that sales have risen, and only time will tell if it really has a big effect on the economy as a whole.

    It must be nice to get an edge on competition by receiving Government funded programs to boost your bottom line. If it helps the overall economy, then why not right?

  7. 7 Carolyne Abrams August 3, 2009 at 12:08 PM

    Lauren- I do agree with you that the Cash for Clunkers program is a great stimulant for auto sales, but I think it also plays a great role in putting more fuel efficient autos on the road.

    According to the Associate Press:
    Transportation Secretary Ray LaHood said the average fuel economy of new vehicles purchased through the program is 9.6 miles per gallon higher than for the vehicles traded in for scrap. (link provided below)

    Considering there have already been about 225,000 cars passed through the system, that is HUGE when it comes to fuel savings.

  8. 8 Stacey Smarker August 3, 2009 at 12:36 PM

    I think that the cash for clunkers is not good for the economy. I feel that this has too many grey areas. It needs to lack and white. Ford just wants to makes the sale and generate money. This will help the environment and jobs but, I feel that they are using this as a bail out for Ford. The money that they offer they get from the government.

  9. 9 Dave Crider August 3, 2009 at 12:54 PM

    My wife and I have been out car shopping over the weekend, and at the Ford dealer here in Napa we had to wait quite a while for an answer from Ford Motor Credit. Our sales person said due to the cash for clunkers program Ford Motor Credit had been swamped. The cash for clunker program has certainly helped all the dealers since it went into effect, Ford has been showing signs of improvement before this program started. I certainly think that is a very encouraging sign for our economy. I also certainly have to give Ford a lot of credit since they did not take the bail out money but survived on there own by making sound business decisions. (for those interested we did not end up buying the car we were looking at, Ford Motor credit came back with 12% interest and we said no way our credit union can do better for us so we are still looking and not in any hurry)

  10. 10 Amanda Smith August 3, 2009 at 3:57 PM

    I actually agree with James on this. It is good that this Cash for Clunkers program is working right now, and definitely good for Ford that sales have risen, but I wonder if it will last or if it was just a waste of money. I think we should wait and see what it does for the economy in the long run before we get all excited about this plan helping.
    I was also glad to see this article, because I am doing my paper on the auto industry. So this gives me more to talk about.

  11. 11 felicia hall August 3, 2009 at 6:31 PM

    This was a very informational article. I had not heard about the “Cash for Clunkers” program, but it sounds like a wonderful plan to get Ford back on track, and more important, generate something positive for the economy. I do agree with the last blogger Amanda, in regards to what will this do in the long run, and is this a waste of money. But, on the otherhand it has to start somewhere, and the car industry is not the only market that will make our economy better.

  12. 12 Caroline Rice August 3, 2009 at 7:14 PM

    Good for Ford! There should be a benefit to an American auto company that did not require federal assistance to keep their business going. Solid business practices should be rewarded. That said I am concerned about the CARS federal program in that the consumer vehicles that are taking part in this program are being given “lethal injections”. While the push for a greener, more fuel efficient car is heartening to see; what is happening to the cars that are being killed for this program? Is there a green and environmental plan to recycle these vehicles or are we going to fill our landfills with the latest “clunkers”?

  13. 13 Carolyne Abrams August 3, 2009 at 9:15 PM

    Just a reminder to fellow bloggers, this is not designed to help one auto producer, it is designed to help all. Consuemers can by from any automaker whether it is Toytoa, GM or Ford. Fortunately Ford happens to be reporting positive sales already.

    I do think this is a great program, but am wondering what will happen once the stimulus plan is over. I don’t believe the senate has approved the additional $2 billion dollars to allocate towards the plan, but regardless, once it does end, will sales dramatically fall? Are the auto industries going to be dependant on these sales past the stimulus plan?

  14. 14 Joseph Garcia August 3, 2009 at 11:20 PM

    This is a nice change compared to the rather bleak numbers they’ve been seeing lately. The Cash for Clunkers is a great incentive for people to go out and buy a new car, while saving money on gas. We already own a Prius for long-distance traveling, but my cousin recently traded in his car for a more fuel-efficient car. I think it gets around 12 more miles per gallon on the freeway. I do hope they can do something positive and creative with the extra used cars being traded in.

  15. 15 Shannon Lackey August 4, 2009 at 12:02 AM

    I am glad to see Ford increase a profit especially in this economy. Whatever can be done to keep some American companies afloat I think is good for our economy. I do not own and American car, but if ford had put out more fuel friendly, economy friendly vehicles a few years back I would be more inclined to purchase. I like to see the forward thinking of what cars will be selling in the future and Fords willingness to morph with the changes instead of prizing themselves on their large gas guzzler vehicles. It is a nice turn of events to see things on the uprise it has been a lot of bad in the news, so profit earning that is happening in out nation can only help.

  16. 16 Jessica Tsai August 4, 2009 at 12:07 AM

    The boost in sales can indeed be attributed to characteristics of certain Ford vehicles that make them more desirable to own. As gas prices are slowly leveling again, any car purchases will most likely be towards models that are more fuel efficient. As we have seen through the history of car production and sales, companies that make vehicles that are fuel efficient with good mileage tend to be well reputed and more successful. I am encouraged to see that Ford has started to focus on more energy-efficient vehicles. Perhaps this trend will rub off on other American automakers since fuel efficiency is a large determinant in what types of automobiles consumers tend to purchase. Hopefully companies such as GM that are undergoing restructuring will focus on improving their vehicles in order to avoid running into the same problems that have occurred in the past.

  17. 17 James Dugger August 4, 2009 at 7:16 AM

    Who would have thought that China would potentially be helping the American Auto Industry?

    Here’s another Article that mentions towards the end that Auto-Sales normally have strong sales this time of year.

    A finally, the link below shows how U.S. Incomes keep falling. People might be biting on buying a new car at the moment, but ultimately, less money to spend equals less money spent.

    I don’t think Ford’s increase in sales will be sustainable until incomes start rising and people start working.

  18. 18 Carolyne Abrams August 4, 2009 at 2:41 PM

    The thing that really breaks my heart over this whole program is what will be done with the trade-ins. According to the CARS.GOV website:

    The CARS Act requires that the trade-in vehicle be crushed or shredded so that it will not be resold for use in the United States or elsewhere as an automobile. The entity crushing or shredding the vehicles in this manner will be allowed to sell some parts of the vehicle prior to crushing or shredding it, but these parts cannot include the engine or the drive train.

    I really don’t understand why they can’t put these cars to better use. There are so many people out there that would benefit from having them.

  19. 19 James Dugger August 4, 2009 at 3:39 PM

    To Carolyne Abrams – In my opinion, they have to eliminate the cars, take them out of circulation, and force consumers to continue to consume. It’s definitely not to help people benefit, that’s for sure. Those cars are bad for the environment, it’s why they started this program right?

    Sorry – I’ll be positive in my next post! (c:

  20. 20 Jessica Tsai August 4, 2009 at 9:28 PM

    I agree with James, the CARS program was created to rid cars that seemingly are not as beneficial as other models. While there are many people that could make use of these vehicles, the problem with the automobile industry currently is being able to produce vehicles that are both safe, adhere to consumer desires, and fuel efficient/friendly towards the environment. Companies such as GM are facing restructuring due to problems fulfilling these demands and Ford has now realized the benefits of producing more eco-friendly vehicles. There are so many other factors other than simple demand and supply in the auto industry and if placed back into circulation, cars that normally would be eliminated through the program may end up causing more harm than good.

  21. 21 Evangelina Alvarez August 4, 2009 at 9:46 PM

    I think the Cash for Clunkers deal is definitley helping out Ford with an increase in their sales. Although, if people were too cheap to buy a new car that they were driving a clunker, they probably aren’t gonna go out and buy a fuel efficient car like we need, or an expensive car. No offense, but Ford makes cheap, affordable cars which is probably helping them sell more cars to get into the standing their at now. Regardless, it is a hopeful reflection of our future economy!

  22. 22 Wen-Li Chan August 4, 2009 at 9:48 PM

    I think it has a little to do with the government’s “Klunkers” budget. Eventhough I think it is a waste of tax payers money, people get to trade in low gas mileage cars for cash and reduce the green house gas. I know Ford is trying to make good cars and improve their image. I think at this point, all the effort pays off.

  23. 23 Juan Balderas-Econ 101 August 5, 2009 at 10:43 PM

    I think the cash for clunkers deal is a wonderful program. It keeps people working, and we all know we really need that right now. But I don’t think it’s a sustainable way of selling cars; the $1 billion is gone and we don’t know if we will get more for the program. I also think that a lot of the people that were planning on buying a car in the near future simply took advantage of the program and bought the car earlier than they were planning on buying in a few months. This may have just stacked up car sales in these few weeks, leading to a lack of car sales in coming months because people have already purchased cars. People are taking advantage of the benefit now, which makes it look like a huge increase in car sales. However, it will be interesting to see at the end of the year, if there was actually that big of jump over the long term.

  24. 24 Kittygirl707 August 6, 2009 at 10:17 AM

    I’m thinking that this is initially a good idea but should have been thought through more thoroughly before implementation. Yes, it’s great that the old cars are off the streets and are being replaced with more efficient vehicles but what about the influx of scrap? Are these cars going to be reused, recycled, or another contributor to our growing mounds of rubble?

    Another interesting perspective was from a South Bay dealership:–Now-52379972.html. Just how long will it take the Feds to reimburse the locals?

  25. 25 Hailey Cook August 6, 2009 at 10:43 AM

    Others would say differently…ever heard of crackpot economics?

  26. 26 Heather August 6, 2009 at 10:56 AM

    The “cash for clunkers” program may be flawed, in that the government keeps running out of money to support it, but it is a short-run boost to a drowning car industry. It also gets environmentally hazardous cars off the road, thus improving the environment and giving consumers more fuel efficient and cheaper forms of transportation. Even if the programs positive effects are temporary, it is a catalyst in the right direction for the economy and the environment

  27. 27 Patrick Powers August 6, 2009 at 10:58 PM

    This cash for clunkers program appears to be be supported, as the government just boosted out $2 billion more to keep it going. It is a good plan to kind of boost the environmental friendly steering wheel in the right direction. Although, money wise, i do not know how much it will affect the car company, because what are they really going to do with the clunkers? ebay?

  28. 28 marie moussa September 15, 2009 at 9:17 PM

    Cash for clunkers, not everyone has an old car to give in return for cash. This is a good idea to keep our environment cleans from burning bad gas. The car makers benefited from this program by selling new cars in returned.

  29. 29 eldiel December 2, 2009 at 11:21 PM

    Definitely a good thing, as Ford was trading under $2 a while, now as it has rebounded back, its a good sign for the automotive industry as well as the economy as a whole. Cars are a luxury good and if people can afford these then its a good sign to a recovered economy.

  30. 30 Vince Kaehler December 6, 2009 at 3:54 PM

    I think that perhaps the reason that ford has saw sales increase was because they did not take government money. I know many people who have decided not to buy GM or Chrysler products because they took gov money and are now partly under gov control. For this reason, many people chose to buy Ford Products. I also believe it has to do with the increase in quality put into these cars.

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