October Auto Sales Rebound – Driven by Surging Korean Brands

U.S. auto sales rebounded from a September lull. Though, with an uncertain election looming over the country, automakers posted relatively modest gains in October, largely driven by surging South Korean automakers.

Hyundai and Kia posted solid gains in sales during October helping U.S. auto sales, on the whole, hold pace to finish the full year close to 16 million for the first time since the COVID pandemic struck in 2020.

Sales are being aided by lower interest rates, a solid stock market and a strong economy that continues to outpace expectations.

South Korean automakers posted the biggest gains during the month as Genesis, Kia and Hyundai all reported major gains in sales for the month – and the strong performance was given a boost from the growing sales of electrified vehicles.

Big month for South Korean brands

Genesis led the way, reporting a sale increase of 21% in October for one of the brand’s best months ever, sales reaching nearly 7,000 vehicles. Genesis has gotten a bump in recent months as it has begun opening standalone stores. Still, most of its business comes from facilities shared with parent Hyundai.

“Hyundai has set a total sales record in the month of October for the third consecutive year,” said Randy Parker, CEO of Hyundai Motor America, as it reported

October sales of 71,802 units, an 18% increase compared with October 2023.

Electrified vehicles gave the largest of the Korean brands a big boost, said Parker. “The Santa Fe HEV, Tucson HEV, and Ioniq 5 led the way, showcasing strong demand for our electrified vehicles that offer cutting-edge technology and exceptional design.”

Kia sets records

Kia America achieved both its best-ever October sales, with 68,908 units sold, and best-ever October dealer sales. These records were driven by growth across its lineup of electrified vehicles and SUVs, company officials said.

Sales of Kia’s all-electric, plug-in hybrid (PHEV) and hybrid (HEV) vehicles increased by 70%, 65% and 49% respectively compared to last year, which helped the brand achieve its highest-ever sales for electrified models in October, Kia noted in a release.

“A number of Kia’s electrified models and SUVs realized double-digit sales increases, propelling Kia to our best October sales performance in company history,” said Eric Watson, vice president, sales operations, Kia America. “Kia continues to appeal to a broad range of consumers as we offer 10 compelling utility models, many with a choice of all-electric, plug-in hybrid, hybrid and ICE powertrains.”

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Competition puts pressure on Toyota

The surge in sales by the South Korean brands was felt by Japanese rivals. Toyota Motor North America reported October 2024 dropped 5.5% for the month.  Lexus Division sales for the month were also down 2.3%.

Toyota did land in positive territory with its passenger cars gaining 2.2%. The newly redesigned Camry gained 10.8%, while Supra 68.2%. It didn’t do nearly as well in terms of SUVs. It’s best-selling product line, the RAV4, fell 13.6%. Pickups fared better, Tundra gaining 22.4% year-over-year, with the newly made over Tacoma gaining 14.4%.

TMNA’s October 2024 U.S. electrified sales represented more than half, 50.2% of TMNA’s total sales volume for the month, an all-time best-ever ratio. The ratio was 31.6% a year ago.

Honda, Subaru staying strong even with headwinds

American Honda sales increased by 2.1%, despite supply issues that limited availability of key models. Sales of light truck and electrified models remained strong for both Honda and Acura brands, the company reported.

Honda brand sales also passed the 1-million-unit mark in October, one month earlier than in 2023.

During October, Honda sold over 30,000 electrified vehicles, primarily hybrids. Gas-electric versions of the CR-V and Accord topped 50% their overall mix, with the Civic Hybrid accounting for over 26% of its October volume. Honda’s first long-range all-electric vehicle, the Prologue EV generated 4,130 sales in October. Acura brand sales totaled 10,847 vehicles in October with strong demand despite supply issues for key models such as the MDX.

Subaru of America, meanwhile, reported volume was up 1.5% compared to October 2023. The recently redesigned CrossTrek had its best October ever, sales rising 15.7% year-over-year.

Economy helping boost sales

Interest rates falling for the first time in months helped boost consumer confident, even as the U.S. economy continued to defy expectations of a downturn. If there was one point of concern, hiring slowed in October — but fallout from hurricanes and labor strikes at Boeing likely caused an undercount of the nation’s workers, according to analysts who reviewed the figures from the U.S. Department of Labor.

The Wall Street Journal noted this week the U.S economy extended its recent strong stretch this summer, bolstered by hefty consumer and government spending. Gross Domestic Product increased by 2.8% annual rate in the third quarter adjusted for seasonality and inflation.

The growth helped maintain the annual rate of new vehicle sales which are now expected to come at least close to the 16 million mark after struggling to rebound from the hit the industry took during the first year of the COVID pandemic.