Hyundai, Kia and Genesis continued to rack up U.S. sales gains in June while largely shrugging off supply constraints and parts shortages that have hobbled other automakers, capping a strong second quarter for the brands as the industry steadily rebounds from the pandemic.
Volume rose 45 percent to a monthly record of 72,465 at Hyundai, while deliveries jumped 43 percent to a June high of 68,486 at Kia. At Genesis, sales advanced 184 percent.
The three Hyundai Group brands are benefiting from new and redesigned crossovers and other light trucks. At Kia, light trucks accounted for 64 percent of all U.S. sales in the first half while crossovers now represent 55 percent of Genesis volume.
Hyundai’s retail volume rose 36 percent to a June record of 66,765. The company said it ended the month with 67,992 cars and light trucks in dealer inventory, down 25 percent from 91,249 at the start of the month.
Randy Parker, senior vice president for national sales at Hyundai Motor America, said close collaboration with dealers, manufacturing and supply chain partners has allowed the company to “successfully manage extraordinary consumer demand.”
Most other automakers will report June or second-quarter U.S. sales tallies later Thursday. Ford Motor Co. will release June results on Friday, followed by second-quarter deliveries from Mercedes-Benz and Jaguar Land Rover later in the month.
Analysts at J.D. Power, LMC, Cox Automotive and TrueCar say U.S. light-vehicle sales are forecast to rise 16 percent to 20 percent or more in June from the year ago period, when the pandemic was still hobbling economic activity, though the sales pace is expected to cool considerably from early and mid-spring on severe inventory shortages.
While the economy continues to recover from the pandemic, analysts say tailwinds from the latest round of government stimulus spending will slowly fade after peaking in the spring.
Many dealers say showroom traffic slowed in the closing days of June as new car and light-truck supplies continued to dwindle.
Even amid slumping stockpiles, some automakers continued to actively market new cars and light trucks last month — a sign a severe semiconductor shortage, among other supply disruptions, has affected automakers to different degrees.
Hyundai pitched lease deals on the redesigned Tucson and Chevrolet dangled similar offers on the Equinox. Toyota advertised the RAV4 and Highlander crossovers, despite tight supplies in some markets. On the other hand, Ford Motor Co., hampered by falling stockpiles of key models such as the F-Series pickup, continued to offer $1,000 off last month on new-vehicle orders that will be delivered at a later date.
The seasonally adjusted, annualized rate of sales is forecast to slip to 15.2 million to 16.4 million in June, based on estimates from TrueCar, Power/LMC, and Cox Automotive. That would be down sharply from May’s 17.09 million rate as well as March and April, when the SAAR topped 18 million – marking the industry’s hottest 3-month stretch since 2005 — but up from 13.23 million in June 2020 when the industry was stilling grappling with shutdowns early in the pandemic.
J.D. Power and LMC Automotive estimate average incentive spending per unit in June will fall to $2,492, down from $4,349 in June 2020 and $3,966 in June 2019. Spending as a percentage of the average MSRP is expected to fall to 5.8 percent, down 4.7 percentage points from June 2020 and down 4.1 percentage points from June 2019, Power said. TrueCar estimates June incentives will average $2,751, down 33 percent from June 2020 and off 10 percent from May. (See charts below.)
Average new car and light-truck supplies fell to 1.5 million units in June from 1.78 million in May, and remained 1.3 million units below June 2020 levels and over 2 million units below June 2019 levels, Cox Automotive said. And the industry’s days supply of vehicle has dropped 61 percent year over year to just above 30 days, Cox said. Among brands with the lowest stockpiles in June were Toyota, Lexus, Chevrolet, GMC, Kia, Subaru, Honda and Land Rover, Cox said, while Alfa Romeo, Fiat, Genesis, Infiniti, Mitsubishi, Buick, Jeep, Ram and Audi had the highest stockpiles,
- There were 25 selling days last month, the same as June 2020.
- The average retail transaction price for a new vehicle in June was expected to reach a monthly record of $40,206 in June, J.D. Power said, up from the previous high of $38,539 set in May.
- Fleet sales, an ongoing weak spot in the industry, are expected to total196,000 in June, up 89 percent from June 2020 and down 39 percent from June 2019 on a selling day adjusted basis, J.D. Power said. Fleet shipments are expected to account for 15 percent of June’s U.S. light-vehicle deliveries, up from 9 percent a year ago, Power estimates.
- The average interest rate on a new vehicle in June was 4.5 percent, TrueCar said, and the average loan term on a new vehicle for June 2021 was 70 months.
“The chip shortage has complicated OEM operations in terms of shifting priorities around what vehicles to build and where to send them. Looking at the second quarter compared to first quarter, we see large shifts in market share with the biggest benefactors being Honda, Hyundai and Kia. Not all brands have been impacted equally, but the common denominator is that everyone wishes they had more vehicles to sell in the current environment.”
— Valeri Tompkins, senior vice president at TrueCar.
“The Fourth of July is going to look a little different this year compared to years past. Instead of being able to stroll into a blowout bargain barbecue event at a dealership, consumers should shop around for deals online beforehand and be ready to pull the trigger as soon as they find what they want. Shoppers who are flexible and have a trade-in are in the best position to secure the best deal this weekend. And given current lower interest rates, consumers might find the best incentives through lease deals rather than cash discounts.”
Ivan Drury, Edmunds’ senior manager of insights.