Ford Motor Co said on Monday that U.S. auto sales rose 2.3 percent in July, its first year-over-year monthly sales increase since November 2007, supported by the U.S. government Cash for Clunkers program.

Ford, whose shares rose as much as 10.75 percent to the highest level since November 2007, said U.S. sales rose to 165,279 vehicles for all of its brands in July, from 161,530 vehicles a year earlier.

Sales rose 1.6 percent to 158,838 vehicles in its core Ford, Lincoln and Mercury brands, it said. U.S. sales in its Volvo luxury car unit that is up for sale rose 25.7 percent to 6,441 vehicles, the automaker said.

Retail sales for the core Ford, Lincoln and Mercury brands rose 9 percent from a year earlier, Ford said.

For its Ford, Lincoln and Mercury brands car sales rose 8.7 percent, crossover sales rose 36.9 percent, SUV sales fell 36.1 percent and truck and van sales fell 14.5 percent.

Ford, the only large U.S.-based automaker that has not restructured in bankruptcy with federal funding, also said it was the first of the major manufacturers that sell cars in the United States to report a monthly sales increase this year.

The increase marked Ford's first year-over-year monthly rise since just before the U.S. economic downturn began. U.S. auto industry sales have been tracking at their lowest annualized rates in nearly 30 years so far in 2009.

The Cash for Clunkers program took effect on July 24, a week before the end of the July sales period.

Ford shares were up 51 cents, or 6.38 percent, at $8.51 Monday on the New York Stock Exchange.

(Reporting by David Bailey)