Cash for Clunkers boosts Ford's July sales 1.6 percent

DETROIT (AP) — Lured by the government's cash-for-clunkers campaign, car and truck buyers started to return to Ford Motor Co. showrooms last month, with the automaker reporting its first U.S. sales increase in nearly two years.

July sales of light vehicles rose 1.6 percent from the same month last year. Ford sold 158,354 vehicles, a 2.2 percent increase over last month and a sign that consumer fears that fueled the worst U.S. auto sales slump in a quarter-century may be easing.

Retail sales - which exclude purchases made to government agencies and rental car companies - rose 9 percent.

Ford's sales, led by the redesigned midsize Ford Fusion, and strong sales of the Escapes crossover vehicle and F-series pickup line, offered encouraging signs for industry analysts who have predicted a modest improvement in the second-half of the year.

The wildly successful clunker program boosted Ford's sales despite concerns about whether it would be suspended during the final two sales days of the month. The program was expected to boost industry sales overall, which were down 35 percent in the first half of 2009.

Called the Car Allowance Rebate System, or CARS, the clunkers program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle.