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Cash for Clunkers Turbocharges July Auto Sales

The U.S. government’s trade-in program, Cash for Clunkers, sparked a boost in demand making July auto sales better-than-expected—more precisely, the best performance since August 2008. GM, Chrysler Group, Fort Motor Co., and Honda Motor all said they were helped by the popular program, with Ford in particular showing a 2% increase year over year while overall U.S. auto sales rose sharply month over month.

The most encouraging news came out from Ford, which achieved the first year-over-year increase from any U.S.-based automaker since November 2007. The Cash for Clunkers program—which give car buyers up to $4,500 for qualifying trade-ins—helped Ford sell significantly more cars and crossover models, even while its trucks and SUVs sales continued to fall from year-ago levels. Unlike GM and Chrysler—both of which emerged from bankruptcy earlier this year—Ford declined bailout funds from the U.S. government.

GM dealers in the U.S. delivered 189,443 total vehicles in July, up 12,000 units from June but down year over year. The July total, when compared with a strong July last year and lower fleet sales this year, was down 19% compared with a year ago. Retail sales were down 9% while fleet sales declined 47%. GM’s June retail performance can be attributed to several key models, including the Chevrolet Aveo, Cobalt, Impala and Malibu nameplates, which contributed to a Chevrolet car retail increase of 8%. Additionally, Chevrolet truck sales increased 27%, led by increases by Silverado, Suburban, Avalanche, Colorado, HHR, and Equinox.

At Chrysler Group, which includes Dodge and Jeep brands, sales were up 30% from June levels. Chrysler said its dealership traffic during the last week of July was more than double the same period a year ago, mainly due to Cash for Clunkers. Year over year, however, sales were down 9%. Still, that was better than analysts’ forecasts that called for a 39% drop year over year, according to Edmunds.com.

Honda and Nissan also experienced increases in July—14% and 23%, respectively—while a year-over-year comparison showed declines of 14% and 25%, respectively.

Sources: Reuters, CNNMoney, GM News

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