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March Auto Sales Look Strong – But Affordability Remains an Issue

by | April 2, 2024

After an uncertain start, U.S. auto sales showed solid momentum in March, with big gains by Japan’s big three and record numbers from Hyundai – which was charged up by EV demand. But Tesla posted a rare sales slid and GM lost ground during the first quarter. Meanwhile, high transaction prices continue to keep many buyers out of the market.

Tesla sales fell during the first quarter, even as Korean EVs, like the Kia EV9, shown above, surged.With Toyota and Honda leading the way, Japanese brands posted solid gains in U.S. sales during the first quarter as consumers placed more emphasis on affordability in the face of steep interest rates, while truck-heavy General Motors saw sales drop during the first three months of 2024.

Tesla, which does not break out U.S. sales, reported its total sales worldwide dropped 8.5%. It was the first time Tesla reported a sales drop in several quarters and re-enforced the slide in the value of Tesla stock.

That added to concerns about slowing EV sales growth – though Hyundai saw a substantial jump in demand for its Ioniq 5 line and Toyota also scored with its first long-range EV, the bZ4X. Nissan also cut into Tesla’s shrinking market share as demand for its Ariya model grew.

Toyota, Honda post big gains in Q1

Toyota Motor North America, paced by its broad line of electrified vehicles, was a leader during the first quarter, posting a sales increase of 20% in the first quarter, including a 21.8% jump in March. Sales by the Toyota brand increased by 21.2% in the first quarter and by 22.7% while Lexus sales increased by 15.8% during the first three months of the year, and by 16.7% in March.

2022 Honda Civic Sedan Touring

March “came in like a lion (and) went out like a lion,” according to Honda.

American Honda reported its sales increased 20% in first quarter of 2024 and were up 11.8% in March. American Honda’s first quarter sales total of 333,824 units were the best since 2021. Honda brand sales totaled 118,536 in March up 14.9%, the brand’s best month since 2021.

“Our March sales momentum came in like a lion and went out like a lion with both the Honda and Acura brands continuing to post strong gains driven by balanced sales of cars and SUVs,” said Mamadou Diallo, senior vice president of Auto Sales at American Honda Motor Co. Inc. “Nearly all models across our lineup posted increases, demonstrating the true strength of the Honda and Acura lineup when we finally have supply to meet customer demand,” he said.

GM reports retail gains – but overall sales slide.

General Motors Co. sales for the first quarter fell 1.5% year-over-year due to lower fleet deliveries even though the company said retail sales increased by 6.5%. GM continued its industry leadership in as it led full-size pickup, full-size SUV, and affordable small SUV sales.

2024 Chevrolet Silverado ZR2

Chevrolet gained ground in the retail market but was down, overall, due to weaker fleet sales.

“Our brands are all performing well,” said Marissa West, GM senior vice president and president, North America. “GM gained retail market share year-over-year with strong mix and pricing, our inventories are in good shape heading into the spring, and production and deliveries of Ultium Platform EVs are rising, led by the Cadillac Lyriq. We’re on plan,” she added.

More auto news

Subaru, Nissan show momentum

Subaru of America, Inc. reported 61,297 vehicle sales for March 2024, a 15.2 percent increase compared with March 2023. SOA also reported year-to-date sales of 152,996, a 6.7 percent increase compared to the first quarter of 2023. March marked the 20th consecutive month of month-over-month sales increases by Subaru.

2025 Subaru Forester front 3-4

Subaru’s new Forester was a factor in its strong March numbers.

Nissan Group announced total U.S. first quarter sales for 2024 of 252,735 units, an increase of 7.2% versus the prior year. Nissan Division increased 8.2% for the first quarter of 2024 with sales of the Sentra sedan, one of the least expensive passenger cars on the market, up 78% year-over-year for the quarter. Sales of the Ariya electric crossover were up 44.8% year-over-year for the quarter. Infiniti Division sales dropped by more than 11%, however.

South Korean run into some headwinds, despite strong EV sales.

Hyundai Motor America reported record-breaking March sales of 76,920 units, a modest 2% increase compared with March 2023.  Hyundai EV sales in March increased 100% and all eco-friendly vehicle sales combined hit 11,485 units, a 35% increase. Fleet volume was 11% of total sales.

2025 Hyundai Ioniq 5 N nose driving REL

Hyundai saw a big jump in demand for the Ioniq 5 EV – the performance N model shown here.

During the first quarter, Hyundai sold 184,804, for a total sales increase of 0.2% compared with Q1 2023, setting a new first quarter record.  EV sales for the quarter jumped 62% compared to the same period last year. “Hyundai keeps producing products that win awards, and demand for our vehicles, especially EVs, remains high,” said Randy Parker, CEO, Hyundai Motor America. “We saw the best Q1 total sales results influenced by Palisade, Kona and Ioniq,” he added.

Kia, by comparison, ran into strong headwinds. Its sales fell 2.4 % in the first quarter and were down 2.5% in March to 69,472 units. But Kia’s EVs saw a significant increase of 151% over the previous year. Sales of the entire utility lineup increased by 9% compared to the previous year and accounted for 79% of total sales.

“Our growth in SUVs and early impact of the all-new, all-electric three-row EV9 helped deliver Kia’s second-best first-quarter sales result,” said Eric Watson, vice president, sales operations, Kia America. “With the recent global debut of the all-new K4 compact sedan at the New York International Auto Show and the refreshed Carnival and K5 models slated to arrive in dealer showrooms in the coming months, Kia will undoubtedly continue to capture the attention of the industry, media and consumers.”

Baltimore Bridge Collapse

Mitsubishi officials worry about the impact of the Baltimore bridge collapse going forward.

Mitsubishi worries about bridge collapse

Mitsubishi Motors North America, Inc., thanks to strong sales across its product line, reported strong first quarter 2024 sales of 28,403, up 35.7% over Q1 2023. Outlander achieved its second-best quarterly sales total in the history of the nameplate, with sales of 13,846, a year-over-year increase of 41.1%.

But the company cautioned the closure of the Port of Baltimore could disrupt new-vehicle inventory, which had climbed to near-pre-pandemic levels.

“The Port of Baltimore is one of the key inbound shipping locations for Mitsubishi Motors vehicles arriving from our overseas manufacturing facilities. We have already redirected a number of shipments to other port locations along the eastern seaboard, and with salvage operations to open the shipping lanes ongoing, the situation remains fluid. We continue to monitor each arriving ship’s schedule and will adjust as necessary, with the priority always being to minimize inconvenience to our customers and our dealer partners,” Mitsubishi noted in a statement.

Affordability continues to pinch.

dealer handshake

Declining used car prices could make it difficult for some current owners to afford trading in.

The port closure is only one of the challenges threatening to hold back sales of new vehicles in the months ahead.

“Punxsutawney Phil may have predicted an early spring, but high interest rates continued to cast a dense shadow over the car market in Q1,” said Jessica Caldwell, Edmunds’ head of insights. “Compelling new product launches combined with the reintroduction of incentives and rebounding inventory in the new vehicle market elevated interest rates have dampened any positive market momentum. t are all positive signs for shoppers,” she added.

The resurgence of “negative equity” – where buyers owe more on an existing loan than the vehicle is worth as a trade in – is only compounding the affordability challenges, according to Caldwell, as consumers who regretted their pandemic-induced purchases are now encountering lower-than-expected vehicle values when returning to dealerships for a new purchase.



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