George S. May Business Blog

Ford Focus is a Cash for Clunkers favorite

In reviewing the numbers this morning, I was staggered by the absolutely astronomical increases in sales that Ford has experienced over the past few weeks. President Obama should be expecting quite a few thank you letters as the massive boost in sales are mostly, if not completely, due to the Fed’s Cash for Clunkers program.

“The National Highway Traffic Safety Administration has processed 80,500 transactions so far, and the early winner of Cash For Clunkers appears to be the Ford Focus. The Detroit News is reporting that the Focus is the number one vehicle purchased under the government program, showing us why Ford’s C-Segment vehicle gained 43.6% in July. Ford also saw an amazing 97% increase in Escape sales in July, a tally that was likely improved with the help of Cash For Clunkers.

The controversial and somewhat clumsy program is drawing plenty of attention for its popularity amongst car buyers, and Detroit automakers appear to be taking more than their fair share of sales. The White House says 47% of all vehicles sold through the bill so far come from US automakers; 2% higher than the domestics’ 45% overall share. Four of the top 10 vehicles purchased under the program come from domestic automakers, and over half of all vehicles were built in the States.

With so many orders in the cue, the Cash For Clunkers program will likely have to be pulled by Friday if more money isn’t appropriated. The House voted last week to add another $2 billion to the initiative’s coffers, and the Senate will vote on the measure on Wednesday or Thursday.

To drum up support for more dollars, the White House is touting the program’s value. White House spokesman Robert Gibbs says the average fuel economy increase so far is 9.4 mpg; a 61% increase verses the vehicles destined for a sodium silicate bath. So far, 83% of the vehicles traded in have been trucks, while 60% of the vehicles purchased under the program have been cars. The White House estimates that Cash For Clunkers will save the average car buyer $700 – $1,000 in gas prices during the life of the vehicle.”

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