GM Boosting Output to Match Response to Clunker Trade-ins

If the U.S. Senate approves additional funding to continue the Car Allowance Rebate System, General Motors Co. could come up “a little short” on inventory.

The so-called cash-for-clunkers program, which could benefit from a $2 billion boost if the Senate follows the lead of House lawmakers, gave sagging U.S. sales a jolt in July.

GM credits the government incentive with draining its ...