Did 'Cash for Clunkers' help auto sales?

The Ford Motor Company world headquarters in Dearborn, Mich.

TEXT OF STORY

Bill Radke: You know the government's Cash for Clunkers deal, right? It gives you up to $4,500
to trade in your gas-guzzler for a new, gas-sipper. So many people have been taking advantage the program is almost out of money. So Ford has just announced its July sales figures and what do you know, they've been selling cars! Marketplace's Jeremy Hobson joins us live. Morning, Jeremy.


Jeremy Hobson: Morning, Bill, I like that term gas-sipper.

Radke:Thank you so much. So how good are those Ford numbers?

Hobson:They're good. They're up 2 percent from July. That is the first year-over-year increase in almost two years. Analysts say it would not have happened, and Ford says it wouldn't have happened, if it hadn't been for the Cash for Clunkers program.

Radke:And now the other automakers report July sales later today?

Hobson:Right. We're going to hear from GM and Chrysler. They'll tell us about their sales for July. We do know that Chrysler is going to abandon its rebate of $4,500 on top of that government rebate because it's running out of cars. It's obviously been a very successful discount to chop $9,000 off the price of a car. Also, Bill, Subaru is saying it expects a 30 percent sales increase because of the Clunkers program.

Radke:So Clunkers helps, but where are sales compared to the good old days?

Hobson:Well, we're still not anywhere near the good old days. The goal this year is going to be to reach 10 million sales in the U.S. Now if I told you 10 million sales two years ago, you would have run for the exits, gotten in your clunker, and driven off like the dickens. But now 10 million, it looks good to people. And if that is the final number, it would allow GM and Chrysler -- which are, of course, just out of bankruptcy -- to break even, according to their estimates. Even though it's 6 million cars less than what we were doing two years ago.

Radke:Marketplace's Jeremy Hobson. Thank you sir.

Hobson:Thank you.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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