Clunkers success boosts auto production as suppliers ramp up

DETROIT -- Auto production is ramping up as dealers clamor to refill inventories thinned out by the unexpected success of the federal cash-for-clunkers program. Toyota, General Motors, Ford and others are hastily boosting -- or considering doing so -- third-quarter production schedules within days of a late-month surge that pushed the July U.S. auto sales rate to its highest point this year.

Suppliers say they are being asked for sharp increases in parts production, especially on small and mid-sized cars and other popular models.

The annualized sales rate for July was 11.1 million vehicles, up from 9.5 million in June and the first time this year the rate has topped 10 million.

GM sales boss Mark LaNeve said the company definitely will boost third- and fourth-quarter production and is just deciding by how much.

"It's smoking-hot -- a home run," LaNeve said after July sales cut GM's inventory to a 64-day supply Aug. 1 from 82 days July 1. "We effectively don't have anything on the ground."

Last month Ford added 65,000 units to its third-quarter production schedule. After July sales cut 49,900 units from Ford's inventory and left the automaker with a 48-day supply, chief sales analyst George Pipas said the company will decide this week whether to further increase production plans.

"We'll sharpen our pencils and figure it out," he said.