) -- For now, let's not worry about whether the Cash for Clunkers program pulled future sales into July.
Forget for a moment that spending billions of federal dollars to move up auto purchases by a few months to get gas-guzzling old SUVs off the road more quickly may not be very cost-effective. Instead, revel in the fact that Monday was a good news day, all the way around, for the auto industry.
was a big winner in July, reporting a 1.6% sales boost, its first monthly gain since November 2007. Ford also gained 1.5 to 2 market share points, pushing it to a 15% to 15.5% share.
reported a 19% sales decrease, the smallest of the year, and only a 9% retail decrease.
reported a 9.4% decrease.
Auto industry investors saw Ford shares rise 4.1% to $8.33. Moreover, GM said it is now looking to production increases later this year, with the Camaro at the top of the list. GM not only has no Camaros in stock, it has a waiting list of 12,000 to 14,000 buyers.
GM's inventory is the lowest on record, at least since recordkeeping began in the early 1970s, said Mark LaNeve, vice president of U.S. sales, on a sales conference call Monday. Inventory is at 466,000 vehicles, down 281,000 or 38% from a year ago and down 20% since June. "We're running almost too lean an inventory," LaNeve said. "We're looking to add production to third-quarter and fourth-quarter numbers."
Mike DiGiovanni, GM's executive director of global sales analysis, noted that if Congress gives Cash for Clunkers another $2 billion, the program alone could push third-quarter GDP up by 0.5 percentage points. He also said GM's 19.4% market share was just a tenth of a point off the 19.5% share the company had expected at the end of the year.
On the Ford call, analyst George Pipas said the company "has been getting closer and closer to a sales increase" over the same month a year earlier, but "we hadn't really planned on the economy taking hold and taking a sales increase until maybe early fall."
"Cash for clunkers put us over the top
and we leveraged this opportunity with the fuel-efficient products we introduced in the past months," he continued For instance, sales of the Ford Fusion rose 66% to 17,610 vehicles.
Without Cash for Clunkers, the industry's seasonally adjusted annual sales rate might have been roughly in line with the 9.7 million June rate, Pipas said. Instead, it was 11.3 million, DiGiovanni said.
Independent auto analyst Tom Libby says that without the program, vehicle sales "would probably have shown a lesser decline than in June," when they fell by 28%.
"Would it have been a good month? No," Libby says. "There hasn't been a good month for a long time. This pulls it up from mediocrity into a positive situation, but we still don't know if this is short-term or a sustained thing."
Either way, Libby says, Cash for Clunkers gave the auto industry a much-needed boost.
"Even if there is payback afterwards, and net
sales even out, it's still good," Libby says. "It gives a spark to the industry, pulls it out of its lethargy. The industry was in the dumps psychologically."
-- Written by Ted Reed in Charlotte, N.C.