Kia and Genesis, behind light trucks, posted sharply higher U.S. light-vehicle sales last month compared with April 2020, when the market bottomed out early in the pandemic and showrooms and factory floors were mostly shuttered.
Volume jumped 121 percent to 70,177 at Kia, the company’s second consecutive monthly record, and 309 percent at Genesis, with the GV80 SUV continuing to outsell combined volume of the luxury brand’s three sedans.
Two cars – the new K5, a replacement for the Optima, and the Forte – set monthly sales records, and three crossovers — Telluride, Sportage and Seltos — set highs for April volume, Kia said Saturday.
Hyundai Group, the parent of Kia and Genesis, has been largely untouched by a chronic shortage of semiconductors that has curtailed light-vehicle production worldwide, allowing the company to rebound strongly more than a year into the coronavirus outbreak.
“Given the showroom traffic our dealers are reporting ahead of the summer opening of the country we are confident our strong performance will continue through the year,” Sean Yoon, CEO of Kia Motors America, said in a statement.
Toyota Motor Corp., Honda Motor Co., Hyundai, Mazda, Subaru and Volvo are expected to report April U.S. results on Monday, followed by Ford Motor Co. on Tuesday.
U.S. auto sales are forecast to nearly double last month to more than 1.3 million, according to analysts at J.D. Power, Cox Automotive and TrueCar, with strong retail demand continuing to drive volume, even as supply disruptions undercut volume.
The market bottom came early in the pandemic, with the seasonally adjusted, annualized rate of sales falling to 8.6 million in April 2020. The sales pace has steadily risen, and in a sign of the market’s strength, the SAAR could top 18 million for the second straight month in April, J.D. Power and LMC said.
Other analysts see the SAAR coming in at 16.5 million or more, with the final figure likely dependent on vehicle availability.
Chronically tight semiconductors supplies have idled auto factories worldwide, crippling dealer stockpiles.
Dealers and analysts say new-vehicle sales lost momentum late in the month as supplies continued to shrink.
Cox Automotive said light-vehicle supplies fell by more than 1.25 million units during the month, a major hurdle for an industry that counts on robust spring sales.
“The market is being driven by inventory right now, not incentives, and it is only getting worse as the chip shortage continues,” said Brian Finkelmeyer, senior director of new-vehicle sales strategy at Cox Automotive. “Most dealers are scrambling to secure inventory in any way they can. Those who aren’t paying close enough attention are losing out to those who are managing it more efficiently.”
Dealers are selling a larger share of vehicles almost as soon as they arrive in inventory. In the first ten days of April, J.D. Power said nearly one-third of vehicles were purchased within 10 days of arriving at a store, up from one-fourth of vehicles that were sold within 10 days in April 2019.
Charlie Chesbrough, senior economist for Cox Automotive, says the industry’s average days supply of vehicles — 65 in an ideal market — is on track to fall into the 30s soon.
Inventories are tightest – a 40-day supply or less – among large trucks and SUVS, midsize trucks, minivans and luxury SUVs, according to Cox Automotive data.
“There is little reason to expect buyer interest to wane anytime soon given recent economic growth rate expectations and improvements to consumer sentiment,” Chesbrough said. “But inventory is a huge problem in the vehicle market.”