Solid sales gains in August point to a robust finish for the year as fear of a recessions in the auto business recede, interest rate cut looms on the horizon, and buyers take a closer look at hybrids and newer EVs.
Korean carmakers scored record sales in August, driven by EV and hybrid demand.
Sales of new cars and trucks continued to gain traction in August, boosted by the growing popularity of electrified vehicles, according to a new round of monthly sales reports, which showed Hyundai, Kia, Genesis, Subaru, Lexus, and Honda all posted increases in deliveries last month.
Several manufacturers hit all-time highs. The only brands reporting a monthly decline in August were Toyota and Acura.
A handful of carmakers, notably General Motors and Stellantis, only report quarterly results. Those who did post August sales appear to have overcome the fallout from the ransomware attack on data service provider CDK that briefly crippled operations at 15,000 dealers earlier this summer.
Korean brands set sales records
New products, like the 2024 Santa Fe helped Hyundai beat expectations in August.
Hyundai Motor America reported record total August sales of 79,278 units, a 22% increase compared with August 2023. Hyundai set total sales records in August.
“This was a record-setting August for Hyundai in total and retail sales,” said Randy Parker, CEO, Hyundai Motor America. “Our entire line-up performed very well but our retail hybrid product mix led the pack with a year-over-year increase of 81%. Kudos to our retail partners who were moving inventory at record pace this month.”
Kia America also closed August with record-breaking retail sales, higher than any other month in company history, as overall sales increased by 4%.
Genesis Motor America reported it sold 7,386 vehicles in August 2024 representing a 15% increase vs. August 2023 and a best-ever U.S. monthly sales achievement for the brand.
What EV slowdown?
EVs and hybrids, like this Prius, charged up Toyota sales last month.
From the Koreans’ perspective, motorists were clearly charged up for their electrified vehicles last month
Hyundai’s retail sales of hybrid, PHEV and EV models collectively gained 49% in August compared to year-earlier numbers — representing 25% of its overall retail total. Hybrids alone jumped 81% and retail EV sales climbed 27% with the IONIQ 5 gaining a solid 74%.
According to Kia’s sales report, the addition of the all-electric 3-row EV9 SUV led to a 27% increase in EV sales over the same period last year, while PHEV models increased 43% year-over-year, resulting in a 9% growth in sales of Kia’s electrified models over August 2023.
The Koreans weren’t the only ones finding strong demand for electrified vehicles last month. Toyota Motor North America gained momentum, as well. TMNA’s August 2024 electrified sales totaled 94,509 vehicles, up 49.1% on a volume basis. For the first eight months of 2024, hybrids, PHEVs and EVs accounted for 40.3% of total U.S. sales, compared to 27.4% in 2023.
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Lexus piles up sales
Lexus trampled everything in its path with new products like this 2024 GX Overtrail.
Toyota Motor North America reported August 2024 U.S. sales of 198,383 vehicles, up 1.9% on a volume basis – a figure that includes both of its North American brands. But Toyota Division sales for the month totaled 168,691 vehicles, down 1.3% on a volume basis. By comparison, the Lexus Division reported demand for August totaled 29,692 vehicles, up 24.8% on a volume basis.
TMNA’s year-to-date sales of electrified vehicles totaled 631,377, up 63.6% on a volume basis. And that marks a significant shift for the overall market considering the Japanese manufacturer’s share of the overall market. From a retail standpoint, it’s the nation’s top selling automotive brand and its sales have increased by 9.3 % so far this year.
A big month for Honda, a stumble for Acura
American Honda reported selling 139,950 units in August, up 25% compared to last year, led by strong passenger car sales, best-ever August light truck sales and a record sales month for electrified models. So far this year, American Honda auto sales are up 11% – outpacing the industry and increasing market share.
Even recent updates couldn’t keep Acura sales in the plus column last month.
Honda brand sales topped 127,900 units in August. It was the seventh straight month sales have topped 100,000 units, and Honda electrified sales set a record with 36,889 units, led by hybrid-electric versions of CR-V and Accord combined with the newly launched Civic hybrid and Prologue EV. The Honda Prologue EV recorded its best sales since launch with 5,401 units as nationwide rollout continues.
Honda light trucks recorded best-ever August sales of 88,726 units (previous best was 86,020 in 2019, boosted by record monthly sales for HR-V, best Pilot sales since July 2021 (14,093) and best-ever August for Ridgeline.
Acura brand sales score second best month of the year with strong sales of 11,997 units in August but posted a modest year-over-year decline. But that raised some concerns among industry analysts considering the automaker’s fresh line-up which includes 2024 updates for the TLX and MDX lines.
Double-digit gains at Subaru
Subaru was another winner in August.
Subaru of America, Inc. reported 63,053 vehicle sales for August 2024, an increase of 11.8 % compared with August 2023. SOA also reported year-to-date sales of 437,198 a 6.4 % increase compared with the same period in 2023.
Jeff Walters, President and Chief Operating Officer, Subaru of America, noted, “August marked our 25th consecutive month of growth thanks to Subaru retailers nationwide. Their dedication to being a trusted partner in the vehicle journey remains an important part of keeping our customers satisfied, whether it is for someone purchasing their first Subaru or returning for their next.”
Rising inventories drive incentives up, prices down
The industry has largely recovered from the semiconductor shortages triggered by the pandemic. That means dealer stocks are pretty much back to pre-COVID levels of nearly 3 million vehicles.
With inventory up, dealers are more willing to negotiate and manufacturers are introducing new incentives.
In turn, average transaction prices – what motorists actually pay after discounts and options are factored in – have been falling in recent months. Rising incentives have also played a role, according to analysis from S&P Global Mobility, J.D. Power and others.
On the hand, “According to the latest data, new- and used-vehicle sales volumes are at the highest level for 2024,” said Jonathan Smoke, Cox Automotive Chief Economist. “With growing demand, supply has tightened, and prices are (again) creeping up.”
Likely rate cuts improve outlook
Looking forward, the Federal Reserve Board is expected to trim interest rates, which have been a drag on affordability, and consumer confidence, according to the University of Michigan. Its ongoing study of consumer sentiment is holding steady if not improving, but the first rate cut in several years could trigger improved attitudes.
U-M’s economic forecasters recently noted light vehicle sales have been stuck in second gear recently, hampered by expensive financing costs. “Smoothing through month-to-month volatility, light vehicle sales have been stuck around the 15.6-million-unit annualized pace for about a year,” it said in a research note.
“On the other hand, the rate of domestic light vehicle assemblies has been trending up over the first half of 2024, notching an annualized rate of 11.3 million units in June. We remain optimistic that the light vehicle sales pace will average 15.8 million in the second half of the year, as lower short-]term interest rates are set to work their way through,” U-M’s forecasters observed.
Paul A. Eisenstein contributed to this report.
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