Ford sales increase expected from 'clunkers' program

Discussion in 'Stocks' started by ASusilovic, Aug 2, 2009.

  1. SAN FRANCISCO (MarketWatch) -- A popular government new-car incentive program will give Ford Motor Co. its first monthly sales increase in nearly two years, according to a media report Sunday.

    Ford sales analyst George Pipas said he wasn't sure if the bump would have occurred without the federal "Cash for Clunkers" program, which offers cash incentives to buy new vehicles, The Wall Street Journal reported in its online edition.

    Pipas reportedly declined to provide specific sales figures, which are scheduled for release Monday.

    Mr. Pipas, your implied question can be answered with :"No."
  2. Ford is losing money on every car it sells still today.

    Ford's sales were down 10.7% YoY, and even though that was better than GM or Chrysler, Ford's sales last year at this time were at 1942 levels, and they're even lower now.

    Ford faces a grave issue because even at a slower cash burn rate of a billion per month, if it doesn't return to profitability soon, and/or if car sales worsen after the CFC program expires (or during it, after the initial 'buzz' wears off), it won't have enough cash to finance its operations.