December U.S. auto sales: Hyundai rises 2%

By -

Hyundai’s U.S. sales rose 2 percent to 66,278 in December, the automaker’s fourth increase in six months, behind a 12 percent jump in retail volume. 

The gain, aided by three extra selling days, came as the company dialed back on incentives in December and the fourth quarter.

Hyundai said retail deliveries totaled 57,777 in December, with an expanded crossover lineup representing 70 percent of retail mix. Fleet shipments dropped 34 percent.

Most automakers will report final figures for 2020 today, capping a year upended by a pandemic and largely salvaged by a steady second-half rebound. Ford Motor Co. is scheduled to release results on Wednesday followed by Mercedes-Benz on Friday and Jaguar Land Rover later in the month.

The market, down 18 percent through September, continued to rebound in December and the fourth quarter from the lows of the second quarter, when the seasonally adjusted sales rate plunged to 8.74 million in April.

Consumer demand remains strong despite another surge of coronavirus cases, analysts say.

The three extra selling days also helped pad the latest results. Year-end and holiday sales promotions were widespread again, though average incentives were down from December 2019. Some automakers deferred payments up to five months on a new-vehicle purchase.

Analysts at Cox Automotive, J.D. Power, TrueCar and Edmunds expect 2020 sales to come in at 14.4 million to 14.6 million, down about 15 percent from 2019. That would mark the lowest tally since 14.49 million in 2012, when the economy was still recovering from the 2008-09 financial crisis.

Analysts call the second-half recovery remarkable given how quickly the virus upended the industry in the spring, dealing a devastating blow to the U.S. economy and job market.  

“Supply constraints likely prevented even better volume performance, but most manufacturers and dealers enjoyed improved profitability as a result of limited supply and robust demand,” said Cox Automotive Chief Economist Jonathan Smoke.

“We enter 2021 still battling the COVID-19 pandemic, but the distribution of vaccines gives us confidence that the economy and the auto market will both see continued progress once we get through the winter.”

Fleet deliveries remain the biggest drag on volume and are not expected to begin recovering until the second half of the year, some analysts say.

SAAR outlook

The seasonally adjusted, annualized sales rate for December is expected to tally 15.5 million to 16.4 million, based on forecasts from Cox, J.D. Power and TrueCar. That would be down sharply from December 2019’s 17.11 million rate. The SAAR slid to 15.88 million in November after topping 16 million in September and October.

Incentives

The average new-vehicle incentive in December was tracking at $4,014, a decrease of $585 from a year earlier, J.D. Power said. The figure is now off 19 percent since peaking at $4,953 per unit in April. TrueCar estimates December incentives averaged $3,991, down 7.4 percent from December 2019. (See charts below)

Odds, ends

  • There were 28 selling days last month vs. 25 in December 2019.
  • The average number of days a new vehicle sat on a dealer lot in December before being sold was on pace to fall to 49 days, J.D. Power said, remaining below the 50-day threshold for the third straight month.
  • TrueCar projects only three brands – Tesla, Volvo and Alfa Romeo – will generate higher U.S. sales in 2020.
  • Fleet sales were expected to total 218,700 last month, or roughly 14 percent of all light-vehicle volume, down from 19 percent in December 2019, J.D. Power said.
  • The average transaction price for a new vehicle surpassed the $40,000 mark for the first time in December, Edmunds estimates

Quotable

“Luxury vehicle sales were an unexpected sales story for 2020, with higher-income Americans, some of whom were not as financially impacted by the pandemic, delivering strong luxury vehicle purchases this year. Brands such as Tesla, Volvo, and Alfa Romeo increased volume year-over-year, and even Lamborghini broke sales records in 2020.”

   — Nick Woolard, TrueCar analyst

Source link

Saurabh Shukla

Leave a Reply