• by Karl Greenberg , August 3, 2009

With the Obama administration hoping to kick-start the Car Allowance Rebate System (CARS), which needs a cash refill, automakers are pointing at July sales to extol the program's virtues. Depending on one's point of view, it was either wildly successful or woefully underfunded -- as the program, slated to run through October or until cash ran out, lasted only days.

Ford seems to have gotten the biggest boost from the program, at least among domestics. It says its retail sales of Ford, Lincoln and Mercury vehicles were up last month 9% versus a year ago. That would make the gain Ford's first year-over-year increase since November 2007.

Sales of Ford vehicles that qualify for CARS were up sharply: Ford Fusion saw a 66% increase; Mercury Milan a 60% increase, and sales of Ford Escape jumped 94% versus the month last year. Sales of the Mercury Mariner were up 71%, Ford Focus sales rose 44%, and the automaker said its sales of hybrid vehicles jumped 323% last month versus July 2008. The hybrid version of the Ford Fusion is also now Consumer Reports' top-rated domestic sedan, tied with the Toyota Camry Hybrid.

The company says 1 million consumers visited www.LetFordRecycleYourRide.com. The only other company that seems to have done as well on a percentage basis was Hyundai, which posted a 21% increase over last month and a 12% increase compared with July 2008 in U.S. sales.

General Motors, which said it has cut 6,000 workers from its payrolls through its Special Attrition Program, reported a 19% drop versus the month last year -- but noted the decrease reflected reduced fleet sales and that comparison was against a strong July last year, anyway. Retail sales were down 9%, while fleet sales declined 47%. Retail sales, however, were up 12,000 units versus last month.

"Our performance is being driven by the outstanding products in our core Chevrolet, GMC, Cadillac and Buick brands," said Mark LaNeve, VP, U.S. sales, in a release. He said GM sales are tracking ahead of what the company had projected. "In July, we are projecting our retail market share to exceed our year-ago performance. We anticipate an additional sales lift in August if Congress approves more funding for the wildly popular 'Cash for Clunkers' economic recovery program."

Chrysler Group reported sales down 9% versus the month last year. That was a single-digit decline for a company that had been wallowing in tsunami-sized troughs of minus 50% and greater. Total sales were up 30% versus the previous month. The automaker also reported record July sales for Jeep Patriot, up 134%; Dodge Caliber sales, up 63%; and Chrysler PT Cruiser sales up 24% versus the previous year. The company has also announced that it will continue production of the PT Cruiser.

Peter Fong, president and CEO of Chrysler brand and chief of Chrysler LLC's sales organization, was hopeful. "While we don't expect the industry sales forecast to change dramatically, we are seeing encouraging signs that consumer confidence is building, and more consumers are considering purchasing a new vehicle," he said in a company release.

Toyota, which launched an ad program late last month to promote its vehicles under the CARS program, said July sales hit a new monthly high for the year. Still, the automaker said sales were off 11.4% from last July. The company, which characterized sales improvements from CARS this month as incremental, said July saw a 27.7% improvement over June.

The Toyota division posted a 10.8% drop from the same period last year, while the Lexus division reported a 16.5% decrease from the year-ago month. Honda had its highest-volume month so far this year; although sales were off 17.3% compared to July 2008 results. But last July's stratosphere-high gasoline prices sent sales of Civic and Fit through the roof.

Honda Civic sales actually increased 3.1% to 30,037. Honda CR-V, a bestseller in the crossover utility vehicle segment, increased sales by 9.9% to 19,151. The Honda division posted July sales of 106,028, a decline of 15.8% compared to last year's aggressive pace. The automaker's Acura division posted July 2009 sales of 8,662, a decrease of 32.5% compared to last year's July sales.