NEW YORK (CNNMoney.com) — Ford Motor Co. reported a 2% gain in July auto sales compared to a year earlier, the first increase from any U.S.-based automaker since November 2007.
Ford said that it was helped by the popular Cash for Clunkers program that gives car buyers up to $4,500 for trading in older, gas-guzzling vehicles if they’re buying more fuel efficient cars. Shares of Ford soared more than 6% on the news.
The program helped Ford sell significantly more cars and crossover models, even while its trucks and SUVs sales continued to fall from year-ago levels.
Ford said overall sales to retail consumers were up 9% from a year ago. But so-called fleet sales to businesses, such as rental car companies, fell by about 16%, partly due to the decision by Ford to pull back from those less profitable sales.
Ford said it did not have any specific numbers of customers who had taken advantage of Cash for Clunkers, but that the program was not the only reason for the improvement in sales.
“We had another strong month in progress before the Cash for Clunkers program started,” said Ken Czubay, Ford vice president of sales, in a statement.
Cash for Clunkers is close to running out of the $1 billion appropriated by Congress to try to spur auto sales and reduce auto emissions. The House approved an additional $2 billion in funding for the program Friday, but the Senate has yet to act.
The recession and high gas prices have hurt demand for cars and trucks, sending automakers’ sakes into a sustained decline. General Motors and Chrysler both filed for bankruptcy earlier this year and even the three largest Asian automakers – Toyota Motor (TM), Honda (HMC) and Nissan (NSANY), have been unable to report a sales increase since August of last year.
It is unclear how many other major automakers will be able to follow Ford (F, Fortune 500) in posting a gain. Sales tracker Edmunds.com, which had forecast a 4% decline in sales at Ford, is predicting declines of at least 10% from the other five major automakers. Only No. 7 Hyundai had been expected to report a gain.
But all the automakers are likely to report a gain in sales when compared to June. That would make this the best month for sales so far in 2009.
Jessica Caldwell, industry analyst for Edmunds.com, said Cash for Clunkers has helped lift auto sales by more than her firm had initially expected. But she added that it’s not clear how much longer the program will boost sales, even if additional funding is approved.
“It’s not clear how many more clunkers there are out there that people are willing to trade, once the initial pent up demand is satisfied,” she said.
Still, Caldwell said that if the funding for the program is extended, industrywide sales in August could be up — and that would be the first year-over-year increase since October 2007.
“With every month having been horrific, any news like this is good news,” she said.
