Car Sales Searing Despite Growing Inventory Concerns

Sales of new vehicles boomed again in May with brands such as Kia and Hyundai posting record months and Honda and Toyota reporting big increases thanks to brisk sales in the long-dormant passenger car segments. 

Passenger car sales showed new signs of life in April, but in May Hyundai’s passenger car sales increased by 105%, while SUV sales increased 34%, noted Hyundai’s Randy Parker in a telephone interview with TheDetroitBureau.com.

“We never got out of passenger cars, and we have two very strong entries in the Elantra and Sonata,” added Parker, Hyundai senior vice president, national sales. 

Hyundai’s strong passenger car line-up played a big role in boosting sales, but Parker also acknowledged thin inventories of utility vehicles were contributing factor. Inventories were so low that many dealerships were literally selling vehicles as soon as they were delivered by the carhaulers, he said.

Alternative energy vehicle sales get a boost

Sales of alternative energy vehicles such as plug-in hybrids, accounted for more than 10% of Hyundai sales in May, he added. 

Overall, Hyundai sales were up 56% compared with a year ago as the South Korean brand sold more than 90,000 vehicles. 

Honda, which saw its sales increased 52% in May, cited strong sales of Honda Civic and Accord — even the Acura ILX posted its best sales numbers in five years. 

Toyota Motor North America (TMNA) reported U.S. May 2021 sales of 242,171 vehicles, up 47% on a volume and daily selling-rate basis. Toyota division sales for the month totaled 212,447 vehicles, up 47 percent. Lexus division sales for the month totaled 29,724 vehicles, up 49 percent. 

TMNA Alternative-Powered Vehicle sales in May, which included passenger cars such as the Prius, Camry and Corolla as well as popular SUVs like the RAV4 hybrid, totaled 58,944, a best-ever May, up 196 percent. For the month, total APV sales accounted for more than 24% of total TMNA sales compared 12.1% in May 2020. 

Toyota’s Bob Carter said he believes car sales would continue to track what was seen in March, an 18.5 million annualized sales rate, if not for the chip shortage and production problems. He told TheDetroitBureau.com he’s never seen the market this hot. Toyota is struggling with a 13-day supply of vehicles, down from their normal, already low 30- to 45-day target.

“Cars come in on the truck and go right back out again,” he said.

Kia America reported its third-successive best-ever monthly sales result, totaling 80,298 units, surpassing the previous mark set in April 2021. Four Kia nameplates — Forte, K5, Sportage and Carnival MPV — enjoyed their strongest months ever. Through May, Kia sales are up 43.9% over 2020.  

“Kia’s continued run of success has hit an important milestone — our very own ‘Triple Crown’ performance,” said Sean Yoon, president and CEO of Kia North America and Kia America. 

“Kia continues to grow market share due to increased dealer engagement, strong marketing campaigns and award-winning products — the latest example of which is the all-new Carnival MPV — which has doubled its market share over the outgoing Sedona.”

Mazda North American Operations reported total May sales of 42,187 vehicles, an increase of 69.2% compared to May 2020. Year-to-date sales totaled 156,562 vehicles; an increase of 58.4% compared to the same time last year.  

Inventories growing thin

Subaru also reported an 8% increase in sales as dealers scrambled to fill orders. 

“In May, based on their total inventory available for sale, our retailers were tremendously efficient in their sales activities in order to achieve these impressive results,” said Thomas J. Doll, president and CEO of Subaru of America Inc. 

“In addition, our retailers did a sensational job of showcasing ‘why’ Subaru products are the preferred selection for those customers looking for the complete package … an adventure-ready and fun vehicle, combined with award-winning safety technology.”

General Motors Co. does not report monthly sales totals, but Duncan Aldred, head of Buick-GMC, said during a briefing for reporters Buick sales were at record levels during May and Buick-GMC dealers were left with, on average, a 30-day supply of vehicles, which is far less than the 90-day supply they normally have in stock and some dealers have run out of stock completely.

Kia retailers observed significantly accelerating showroom traffic over the Memorial Day weekend due in part to the increasing opening up of the country, Kia officials noted. 

The thinning inventories appear to have slowed sales in May, according to IHS Markit, which projects a SAAR of 16.6 million to 17 million units for the month, compared to an 18 million-unit reading in March and a 18.5 million-unit mark in April. “As sales data comes in, we are seeing consumer demand remain higher than supply. With the supply chain remaining fragile, this tension is expected to continue and to contribute to volatility amongst automaker performances,” added Stephanie Brinley, principal automotive analyst for IHS Markit. 

Source: https://www.thedetroitbureau.com/2021/06/car-sales-searing-despite-growing-inventory-concerns/