UPDATE 1-Ford sees dramatic 'cash for clunkers' boost

* Ford says pace of sales has picked up dramatically

* Ford sales chief: July sales strong before incentive

* Ford encouraging federal officials to consider extension

DEARBORN, Mich., July 30 (Reuters) - Ford Motor Co (F.N)
has seen a sharp increase in sales over the past week since its
dealers began accepting trade-ins under the U.S. government's
"cash for clunkers" incentive program, the automaker's U.S.
sales chief said on Thursday.

"We were having a strong month before (cash for clunkers)
started," said Ken Czubay, who heads Ford's U.S. marketing and
sales operations. "The pace of sales has picked up
dramatically."

Czubay said that while Ford did not have a forecast for the
industry-wide sales rate for July, it appeared likely that
overall sales could top 10 million vehicles on the annualized
basis tracked by analysts.

That would represent the highest sales rate of the year and
would strengthen expectations that U.S. vehicle sales have
stabilized after a four-year decline that drove them to their
lowest levels since the early 1980s.

The U.S. government has allocated up to $1 billion for
incentives to encourage Americans to trade in older and less
fuel-efficient vehicles for new models.

Consumers are eligible for a rebate of up to $4,500. Auto
industry executives expect the program to add about 250,000
vehicles to the 2009 sales tally.

Similar government incentives have boosted sales in Europe
and the auto industry has already begun lobbying for additional
funding for the U.S. program.

The National Automobile Dealers Association has projected
that the current cash for clunkers funding will run out before
the Nov. 1 expiration of the incentive.

Czubay, who spoke to reporters at Ford's product
development center, said that the Ford website set up to direct
consumers to the automaker's vehicles that qualify for the cash
for clunkers program had received 500,000 hits.

He also said Ford dealers had been so busy with the program
that he has been forced to take daily calls with them as late
as 9 or 10 p.m. because of the surge in showroom traffic and
sales.

Ford, like other major automakers, will report U.S. sales
for July on Monday.

Ford shares were up 3.7 percent, or 26 cents, at $7.38 on
Thursday afternoon on the New York Stock Exchange.

The No. 2 U.S. automaker saw sales drop 32 percent in the
first half, a smaller decline than the nearly 35 percent drop
for the market as a whole.

Ford is the only U.S. automaker that has not restructured
in bankruptcy with federal funding.
(Reporting by Michael Strong, writing by Kevin Krolicki,
editing by Matthew Lewis)