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Ford Posts First Positive Sales in 2 Years

Ford
Ford

Credit Cash for Clunkers with giving Ford the boost needed to post its first positive monthly sales in 2 years.

The Federal rebate program spurred customers to go into showrooms and trade in their gas guzzler for a more fuel efficient Ford model. Funny how $4,500 from Uncle Sam can make people want to buy a new ride.

But Ford's success is also due to a number of factors beyond Cash for Clunkers.

* Ford has momentum, and the buying public senses that. Just as car buyers shy away from brands that are struggling, strong word of mouth prompts people to rotate to those brands that are improving.

* Ford has the new product to draw buyers. Sure, most people trading in their old Explorer may not have bought a Flex or Hybrid Fusion, but those models are drawing the attention of buyers.

* Owners of old Ford Explorers finally get the extra money needed to offset weak residual values. Last fall, thousands who wanted to dump their gas guzzling old Explorer were looking at extremely weak residual values, so they didn't have enough to make a trade-in work. $4,500 from the Federal government makes up for those low residual values.

The strong July sales come one day before the first of the new Taurus modelsrolls off the assembly line. That car will hit showrooms this fall and give Ford another boost. It's a huge improvement over the boring Taurus/500 model it replaces.

White House Hopeful on 'Clunker' Extension

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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