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Clunkers Jump-Start U.S. Auto Sales in July

Love it or hate it politically, the Car Allowance Rebate System, better known as "Cash for Clunkers," moved the metal in July.

U.S. auto sales were 997,824 in July, 12.2 percent below the year-ago month, according to AutoData Corp. That's a big improvement over year-to-date auto sales, which were down 32.1 percent to about 5.8 million.

Moreover, the Seasonally Adjusted Annual Rate for U.S. auto sales was 11.24 million in July, the first month this year that the SAAR topped 10 million.

Ford sales were up 1.6 percent to 158,354, the first time this year Ford managed to top the year-ago month. Ford said its Focus small car got a big boost from the CARS program. Ford Focus sales gained 43.6 percent for the month, to 21,830.

Besides Ford, Hyundai, Kia, Mercury, Subaru and Volkswagen had higher sales in July than the year-ago month. U.S. sales were up 34.2 percent for Subaru in July.

Ford said that consumers trading in an older V-8 for a four-cylinder Focus could save $1,000 per year on gasoline.

"What's the consumer going to do with that $1,000? It's the gift that keeps on giving," said George Pipas, U.S. sales analysis manager for Ford.

"They could save it â€" and that's not bad, improving the household balance sheet â€" or they can spend it, and that's going to have a good effect on the economy," Pipas said.

Moving the metal is something the U.S. auto industry has been failing at all year long, despite cheaper gasoline, near-record incentives, and a somewhat improved picture for auto financing.

Pipas said consumers haven't gotten over last year's spike in gas prices, even though prices came down since then.

"Does anybody think consumers have forgotten what happened with gas prices last year? You know what they did last week (by trading in gas-guzzlers)? They took out insurance. They said, 'I'm going to be ready for next time gas goes to $3, or $4, or whatever,' " Pipas said.

Photo: Ford

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