The Auto Writer

Because the latest weekend consumed the first two days of August, July 2009 domestic auto sales figures were not announced until Monday, August 3rd. However, as early as Saturday the Ford Motor Company stated that its sales for the month were up over June 2008, breaking a year long decline among major car manufacturers.

CARS Kicks In

Contributing to the stellar month was the controversial Cash Allowance Rebate Systems (or CARS) program that kicked in for the final week of July. That car scrappage program — also known as “Cash For Clunkers” – managed to unleash pent up demand as eligible consumers visited new car dealerships en masse in a bid to get between $3500 and $4500 in on the spot rebates applied to their transaction.

The CARS program was so successful that it was in danger of running out of money even before the month ended. The House agreed to extend $2 billion more to CARS but the Senate may not do so when they take up the program’s expansion this week. Members of Congress seemed surprised that CARS, which has been problem plagued from the beginning, had been depleted so quickly. Keep in mind that this is the same Congress that wants to manage health care for 300 million Americans.

Big Gains For Most

Regardless of what the federal government decides to do with CARS, the car scrappage program has helped to reverse a decline in fortunes for the US market, though analysts are not in agreement on what that means exactly. Manufacturers such as Ford, Subaru, Volkswagen, Hyundai and Kia benefited tremendously from CARS, but each company had been trending upwards for the past several months without it. Indeed, some analysts believe that customers delayed their new car purchase until CARS was announced, while others may have moved their purchases forward in order to take advantage of the program.

The biggest gainers for the month include Subaru, up 32%, and Ford, up 2.3% versus July 2008. Chrysler sales were down 9% for the month, while GM sales slid 19% (with Chevrolet increasing by 1%). I am of the opinion that Ford will pass GM sales in the US domestic market by the end of 2009.

Honda sales were down by 17% and Toyota was down 11% while Hyundai sales increased by 12% thanks to double-digit increases for the Accent, Elantra and Sonata. Volkswagen sales edged up by 0.7% while Kia sales increased by 4.7%. Nissan sales had one of the biggest slides for the month, down by 24.6%.

See Also — And They Want To Manage Our Health Care?