Hey, they may not be pretty, but these clunkers seem to be helping the auto industry.
Hey, they may not be pretty, but these clunkers seem to be helping the auto industry. ThreadedThoughts/Flickr
U.S. car makers cited the Cash for Clunkers program today as they released their latest sales figures today.
Ford's July sales release shows a 2 percent sales increase from the year ago — the first month without a decline since November 2007. The automaker gives direct credit to the government's trade-in program, which has proved so popular that it has almost plowed through its original $1 billion in its first few days. The program's goal of getting Americans into more fuel-efficient vehicles also seemed to work: Ford also saw a 323 percent increase in hybrid sales.
On the other hand, Chrysler's still smarting from bankruptcy and showed gloomier numbers — sales were down 9 percent from last year. Still, there is a silver lining — that's a smaller year-on-year drop than Chrysler's had over the past few months. Plus, sales jumped 30 percent from last month. Chrysler also said today that it's going to halt its offer to double the cash incentive from the Cash for Clunkers program, saying that the program worked too well: they simply don't have the inventory to keep it up.
GM finished off at the bottom of the U.S. pack, reporting a 19.4 percent drop in sales from last year, but it managed to see an eight percent increase in sales from June. In the release, vice president Mark LaNeve put it bluntly: the company expects to continue positive momentum in August if the Cash for Clunkers program sticks around.
The Obama administration says nearly half of the sales from Cash for Clunkers went to U.S. car makers. The House approved another $2 billion for it, but it faces more resistance in the Senate.
Meanwhile, foreign auto dealers also noted better sales: Honda's sales dropped 17 percent in July compared to 2008, but that's its best month so far this year.
Daimler AG, maker of Smart and Mercedez-Benz cars also saw sales fall 24 percent in July in the U.S. It's not surprising that a luxury automaker isn't doing well in the recession — especially since the Cash for Clunkers program offers a flat $4,500 discount, which doesn't put much of a dent in the price of a Benz.