Money Matters, Simplified.
Ford makes hay while cash for clunkers shines
by Jamie Anderson - August 3, 2009 - comments
The Cash for Clunkers program was a smashing hit. And in its wake, it brought good fortune for Ford. The most-traded-in vehicle was a Ford Explorer and most buyers drove out with new Ford Focus.
Michigan, August 3: Riding high on the “cash-for-clunkers” rebates rolled out by the U.S government, Ford Motor Co. (NYSE: F) declared its first monthly U.S. sales increase since 2007.
The increase is also the first reported by any of the six largest auto makers since August 2008.
Ford: moving from strength to strength
Sales at Ford were projected to drop 6.1 percent; however the tables were completely turned with the launch of the clunkers program.
Michigan based Ford is the only U.S. automaker that managed to keep its head above the water without taking the help of bailout funds.
The Detroit major added to its domestic market share in July as the clunkers credits attracted buyers to the car showrooms.
Ford’s share of U.S. sales rose to 17 percent in June up from 14 percent in the comparative period last year.
The company is on track to meeting Chief Executive Officer Alan Mulally’s target of reporting an operating profit in 2011.
“It’s a continuation of what Ford has been working on for the last year gaining better-quality market share,” said Robinet, an analyst.
Cash for Clunkers: Take a bow
A key indicator of the health of the U.S auto industry is the seasonally-adjusted annualized selling rate. The rate has been an abysmal 9.7 million in June, down from a peak of 16 million units reported before the current economic recession crept in and spoiled the party.
The last few days in the month of July saw a huge spike in the sale of new vehicles as customers thronged the dealerships, swapped their gas guzzlers with more fuel efficient cars and availed of the hefty discounts.
Many analysts now feel that the annualized selling rate could top 12 million for July, 2009’s best showing, courtesy the Cash for Clunkers program.
Michael Robinet, an analyst at consultant CSM Worldwide Inc said, “There was a lot of pent-up demand. Whether we can continue this after the program ends is going to be interesting to see.”
6 days is what it took for the prospective and eligible buyers to exhaust the $1 billion available under the federal Car Allowance Rebate System (CARS). Whosoever could, took full advantage of the concessions that were offered. The range of these rebates was between $3,500 to $4,500 depending on the make, model and mileage of the vehicle.