The Hyundai Kona subcompact crossover led the way with a 71 percent gain to 5,777 deliveries. Santa Fe and Tucson both recorded double-digit hikes. Among decliners, the Elantra fell 21 percent and the Palisade slipped 26 percent.
August U.S. inventory for Hyundai was 53,075 units compared with 47,836 in July. Inventory in August 2022 was 19,209, the company said.
Kia’s results were paced by surging sales of the Niro compact crossover with 3,896 deliveries and the Carnival minivan with 5,428. Kia Soul sales slipped 23 percent to 4,911 units.
“Exceeding 70,000 units for four consecutive months and doubling year-over-year sales of our electrified offerings is proof that Kia is ahead of the competition and delivering highly desirable and innovative models across many of the industry’s largest segments,” Eric Watson, vice president of sales operations at Kia America, said in a statement. “Kia’s electrified offerings combined with our rugged and capable SUVs have strategically positioned the brand to not only increase our EV market share, but further establish ourselves as the leader in innovative mobility.”
Consumers responded to dealers having their highest inventory levels in almost two years by buying new vehicles in August at a pace expected to be up sharply from a year ago, when inventory levels were far leaner, and despite higher interest rates, according to industry analysts.
Six other automakers will report their August sales Friday or early next week, while others report sales on a quarterly basis. Before the results were announced, analysts expected sales to rise between 15 and 20 percent year-over-year.
Analysts estimated that the seasonally adjusted annualized sales rate for August would finish near 15.4 million, down slightly from July’s 15.7 million, but far above the August 2022 SAAR of 13.2 million.
The main driver was inventory. Compared with last year, dealers have about 70 percent more new vehicles on their lots available to sell than they did at the same point in 2022, when inventory levels were just starting out on what has turned into a sustained recovery.
Chesbrough said that increased interest rates and higher pricing “remain strong headwinds against a more robust vehicle market.”
Those headwinds may be intensifying, said Chris Hopson, principal analyst at S&P Global Mobility, who noted that the daily selling rate metric was likely to fall below the 50,000 vehicle mark in August for the first time since February, though it’s not expected to slide much further.
“New vehicle affordability concerns will not be quick to rectify,” Hopson said. “Rising interest rates, credit tightening and new vehicle pricing levels slowly decelerating remain pressure points for consumers.”
Fleet sales are expected to total 245,785 units in August, up 46 percent from August 2022, J.D. Power said. Fleet volume is expected to account for 18 percent of total light-vehicle sales, up from 14 percent a year ago.
Jeff Schuster, group head and executive vice president for automotive with GlobalData, said his firm had to back down its initial projections for August sales as the month progressed.
“There has been some weather-related disruption, but we did pull things down a bit from where we were tracking the first two weeks of the month,” Schuster said. “The resilience is still there; consumers are still grabbing anything they can that’s not tied down at a dealership, and the deals are still minimal out there. But we could be getting to the point where consumers are getting frustrated [with pricing].”
The seasonally adjusted, annualized rate of sales for June is projected to come in at 15.2 million to 15.5 million in August, forecasters say, down from 15.9 million in July and up from 13.4 million in August 2022.
Average prices fall back
The average new-vehicle retail transaction price in August is expected to reach $45,537, down $566 from August 2022. The previous high for any month — $47,362 — was set in December 2022.
J.D. Power and GlobalData said retail inventory levels in August had risen to around 1.3 million units, an increase from July and up 48 percent compared with August 2022. The figure was still well below pre-pandemic levels, however.
Cox Automotive said inventories were tightest at Honda, Kia, Toyota, Subaru, Lexus, Cadillac and Hyundai in August, while Chrysler, Dodge, Ram, Jeep, Infiniti and Buick had the largest days’ supplies of inventory.
Average incentive spending per vehicle in August is expected to reach $1,902, up from $953 in August 2022. Spending as a percentage of the average MSRP is expected to increase to 4 percent, up 1.9 percentage points from August 2022, per J.D. Power.
Average interest rates for new-vehicle loans was expected to increase to 7.3 percent in August, up 182 basis points from a year ago.
Retail buyers are on pace to spend $47.8 billion on new vehicles, up $5 billion from August 2022, J.D. Power estimated.
“We’re still seeing demand that has existed, and that pent-up demand is still there. But we could be getting to the end of that. The UAW negotiations could throw a wild card into the remainder of the year. If we go the route of not a lot of disruption, I would expect this pattern to continue through the end of the year.
— Jeff Schuster, group head and executive vice president for automotive with GlobalData
Philip Nussel contributed to this report.