DETROIT (Reuters) - Consumers taking part in the U.S. government’s “Cash for Clunkers” program have aimed more for smaller, more fuel-efficient vehicles than larger trucks, Ford Motor Co’s sales analyst said on Friday.
“This program seems to be achieving its desired ends,” George Pipas said in a telephone interview.
“They wanted a program that would jump-start auto sales as a way to speed up economic recovery, and they wanted to take larger, less fuel-efficient vehicles off the road and have a positive impact on fuel consumption and the environment.”
How that impacted July U.S. auto sales remains unclear, Pipas said.
Demand for more fuel efficient vehicles suggests sales on the initial $1 billion part of the program will be less than 250,000 vehicles, he said.
The program offers consumers up to $4,500 to trade in older, less fuel-efficient vehicles to be scrapped.
The U.S. House of Representatives has approved an additional $2 billion for the program. The extra funding, which the White House backs, also has support in the Senate.
Ford shares jumped 7.6 percent to $7.95 on Friday as expectations grew that the program would be beefed up.
If the sales from the first $1 billion were all recorded in the July sales period, which ends at midnight Friday, that could boost the seasonally adjusted annualized rate of sales used by economists by as much as 2.5 million, Pipas said.
He said he was not sure it would be possible to complete the paperwork necessary to attribute all the sales to July, and in any case some vehicles likely would have been sold even without the program.
“We were selling Fusions and Fusion hybrids and Escapes and Focuses before the program even started,” Pipas said. “Surely, without the program, we would have sold some in the last week of the month. In fact, we were selling quite a few of them.”
Ford has provided a vague projection for July U.S. auto sales, saying reports that the seasonally adjusted annual rate would be above 10 million vehicles are accurate.
“That leaves a lot of room for more upside, I appreciate that. But the sales traffic in the dealerships has been so fast in these last six days that it really is hard to say how much business is going to be put into the system by midnight tonight when the month ends,” Pipas said.
A 10 million unit annualized rate would be the best of 2009, providing more support for expectations that the market hit a low in February with an annual rate of 9.1 million. But it would still be far below the 13.2 million vehicles sold in 2008.
Reporting by David Bailey; editing by John Wallace
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