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Hyundai posted a 8 percent decline in U.S. sales last month as some quirks in the reporting calendar and ongoing challenges from the pandemic ended a brief run in the winning column.
Crossover deliveries rose 6 percent while car demand skidded 27 percent, the company said.
In July, Hyundai’s sales advanced less than 1 percent as the company recorded its first monthly increase since February.
The automaker continues to benefit from strong retail demand for crossovers, notably for newer models such as the Palisade and Kona, in another sign the market is bouncing back from the worst of the coronavirus outbreak.
Retail sales slipped 2 percent, Hyundai said, while fleet deliveries dropped 63 percent, representing just 4 percent of August volume.
“Despite a down market, our SUVs continue to drive sales and deliver results for us and our dealers,” said Randy Parker, vice president for national sales at Hyundai Motor America.
U.S. light-vehicle sales are forecast to fall about 20 percent in August, based on estimates from Cox Automotive and LMC Automotive.
The August tally will also reflect two fewer selling days than in August of 2019. In addition, sales stemming from Labor Day holiday promotions will by chalked up in September this year. Last year, they were part of August’s results.
Toyota Motor Corp., Honda Motor Co., Kia, Subaru, Mazda and Volvo are also expected to report August results later Tuesday. The rest of the industry discloses sales quarterly.
The seasonally adjusted sales rate, based on ALG, LMC and Cox Automotive forecasts, is expected to continue to rebound, rising to about 15 million in August from 14.53 million in July. That would still be down from the rate of 17.1 million in August of 2019.
The SAAR has increased every month since plunging to 8.66 million in April.
Depleted inventories, high unemployment, reduced household spending, sinking consumer confidence as well as lower incentives remain a drag on the market, analysts say. Factory shutdowns that lasted as long as eight weeks continue to be reflected in low dealership inventories, even as more shipments arrive daily.
Toyota, Lexus, and BMW each had less than a 40-day supply of vehicles in late August, far below the current industry average of 60, Cox Automotive said.
And nearly 45 percent of all new vehicles sold in August will spend fewer than 20 days on dealer lots, up from 35 percent last year, J.D. Power estimates.
Average incentives fell to $4,105 last month from $4,154 in August 2019, J.D. Power said. ALG estimates incentives last month rose 5 percent to $3,902 from $3,716 in August 2019. (See chart below.)
- There were 26 selling days last month vs. 28 in August 2019.
- The average incentive on cars was expected to rise $22 to $3,709 in August, while discounts on trucks, crossovers, SUVs and minivans were forecast to drop $99 to $4,226, J.D. Power said.
- Driven by truck demand, the average U.S. transaction price for a new light vehicle was $38,635 in August 2020, Kelley Blue Book said, an increase of $1,442, or 3.9 percent, from August 2019, and up $72, or 0.2 percent, from July.
- Fleet shipments were expected to total 141,900 in August, down 34 percent from August 2019. And fleet volume was expected to account for 11 percent of total light-vehicle volume, down from 14 percent a year earlier, J.D. Power said.
“The global auto sales recovery is accelerating. … Wild cards for the remainder of the year include the U.S. presidential election, financial stimulus programs and any specific vehicle purchase incentives, so uncertainty is still at an elevated level.”
— Jeff Schuster, president of Americas operations and global vehicle forecasts at LMC Automotive.
“Supply and inventory are still expected to be a challenge in high demand segments going into the fall, due to factory shutdowns this past spring. Additionally, a potential second wave of shutdowns during the fall and winter seasons remains a concern.”
— Sara Richards, Kelley Blue Book analyst