Hyundai’s U.S. sales edged up 1 percent to 57,395 in October behind a second consecutive month of double-digit growth in retail deliveries, in the latest sign the market continues to claw back amid the coronavirus pandemic.
Retail demand, driven by an expanded crossover lineup, rose 10 percent to 52,117 last month while fleet sales fell 45 percent, Hyundai said.
“The automotive retail market continues to show resiliency,” said Randy Parker, vice president for national sales at Hyundai Motor America.
Hyundai said crossovers represented 68 percent of the brand’s retail units sold in October, with retail sales of crossovers advancing 23 percent.
Retail deliveries of the redesigned Sonata rose 20 percent. Overall, Sonata sales rose 25 percent last month, but remain down 18 percent for the year. Still, Parker called the midsize sedan’s performance last month “a sign that the right sedan can still drive consumer demand.”
Other automakers
Toyota Motor Corp., Honda Motor Co., Subaru, Kia, Mazda, Volvo and Genesis are scheduled to report October sales later Tuesday. The rest of the industry releases U.S. sales results on a quarterly basis.
The seasonally adjusted, annualized rate of sales in October is forecast to come in at 15.7 million to 16.4 million — topping 15 million for the third straight month — according to estimates from Cox Automotive, TrueCar/ALG and J.D. Power/LMC.
The SAAR tallied 16.9 million in October 2019 and has steadily increased every month since bottoming out at 8.7 million in April. But that five-month streak is in doubt after September’s faster-than-expected 16.51 million pace.
Retail demand rebounded quickly in the spring, but the recovery seems to have plateaued amid lean stockpiles and sharply lower fleet sales. Third-quarter sales trailed 2019’s results by 9.5 percent, narrowing the year-to-date deficit to 18 percent.
What’s more, rising COVID-19 cases and new government restrictions on household and economic activity could undermine the rebound.
“Consumer demand is showing remarkable strength,” said Thomas King, president of the data and analytics division at J.D. Power. “The strong sales pace is occurring despite tight inventories. The combination of strong demand and lean inventories is enabling manufacturers to reduce new-vehicle incentives and is allowing retailers to reduce the discounts they typically offer on new vehicles.”
Incentives
The average incentive in October was tracking at $3,678 per vehicle, a decrease of $425 from October 2019 and the second consecutive month below $4,000, J.D. Power estimated, adding discounts have trended down since peaking at $4,953 per unit in April.
ALG forecasts October incentives averaged $3,869, up 2.6 percent from October 2019 but down 5.2 percent from September, with General Motors, Fiat Chrysler Automobiles and Nissan Motor Co. among the top spenders. (See chart below.)
Odds, ends
- There were 28 selling days last month, one more than October 201
- The average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to 49 days, the first time it has slipped below 50 days in more than eight years, J.D. Power said.
- For the fourth consecutive month, one in five vehicles was sold after being on a dealer lot for only five days or less, J.D. Power said.
- Average transaction prices are projected to rise 3.1 percent, or $1,123, to $37,018, from a year ago and up 0.7 percent, or $262, from September, ALG estimates.
- Fleet deliveries are expected to tally 128,500 last month, down 44 percent from October 2019 on a selling day adjusted basis, J.D. Power said, and fleet volume is expected to account for 10 percent of overall light-vehicle demand, down from 17 percent in October 2019.
Quotable
“The auto industry recovery is absolutely striking. We clawed back more new car sales each month since sales bottomed out in April and are now seeing year-over-year new car retail sales growth for two consecutive months. This is a phenomenal outcome for the industry, as inventory is starting to rebound and demand remains high. There are positive signals that the recovery will sustain.”
— Eric Lyman, chief industry analyst for ALG
