New and redesigned crossovers, along with strong retail growth, drove Hyundai to another U.S. sales gain in August, with volume rising 12 percent for the second consecutive month.
It is the brand’s 13th straight month of year-over-year gains.
Retail volume increased 11 percent in August, Hyundai said, marking the sixth time in the last seven months that the brand achieved year-over-year retail sales growth. Hyundai, along with Kia, were also among the few automakers to reduce incentive spending in August, according to ALG data. (See chart below.)
Retail deliveries of Hyundai crossovers totaled 34,844, a monthly record, with sales of the subcompact Kona rising 34 percent. Hyundai said August sales of the new three-row Palisade crossover topped 5,000, exceeding company targets.
"Given this response we are working hard to increase dealer inventory to satisfy the tremendous demand” for Palisade, Randy Parker, vice president of national sales for Hyundai, said in a statement.
Labor Day boost
U.S. light-vehicle sales are forecast to rise for the second straight month in August, helped by five sales weekends that included the key Labor Day holiday, though Hurricane Dorian is expected to dampen demand in parts of Florida and the southeast.
Many dealers along Florida’s Atlantic coast shuttered or curtailed sales operations over the weekend as showroom traffic dwindled and to allow employees to prepare for the storm.
The seasonally adjusted, annualized sales rate for August is forecast to drop to 16.5 million to 16.8 million, from 16.82 million in July and 17.01 million in August 2018, based on estimates by ALG, Edmunds, Cox Automotive and J.D. Power/LMC Automotive. If the forecasts hold, it will be the fifth month this year the sales pace ran slower than 17 million.
Healthy job gains and steady economic growth continue to support sales, analysts say, even as rising new-vehicle prices discourage some buyers.
Analysts say Ford is the only major automaker expected to generate lower sales last month as the company continues to largely exit the sedan market. General Motors, Ford and FCA US now report U.S. sales on a quarterly basis.
U.S. sales rose 1.2 percent in July – the year’s first gain -- but are off 1.9 percent through July based on Automotive News data center estimates, with lower retail demand offset by stronger first-half fleet deliveries.
But sales have varied widely across the country. LMC Automotive says retail sales fell 2.4 percent through July, with retail demand down 1.1 percent in the Northeast and flat in the Southeastern U.S.
In the first seven months, retail deliveries fell 7 percent in the Southwest, 5 percent in the Northwest and 4 percent in North Central and Southern states.
Industry volume has topped 17 million four straight years but some analysts see that streak ending in 2019 as rising new-vehicle prices deter some consumers, even amid solid job gains and slower economic growth.
Spiffs rise
Incentive spending rose last month, with ALG estimating discounts averaged $3,825, up 1.2 percent from August 2018, with big gains in deals at GM, Honda and FCA . LMC and J.D. Power said incentives rose to $4,177 from $3,878.
Odds, ends
- There were 28 selling days last month vs. 27 selling days in August 2018.
- Days to turn, or the average number of days a vehicle sits on a dealer lot before being purchased, was 74 through Aug. 25, up from 67, J.D. Power said.
- Fleet deliveries last month are projected to total 217,600, flat with August 2018, J.D. Power and LMC said. Fleet volume is expected to account for 13.4 percent of total light-vehicle sales last month, down from 14.1 percent in August 2018.
Quotable
“Consumers continue to shake off the political and trade turbulence because the economy remains on solid, if somewhat slowing, footing. This foundation, combined with higher fleet volume in the first half of the year, will keep the industry above 17 million units for a fifth year in a row.”
-- Jeff Schuster, president of global vehicle forecasts at LMC Automotive
