August was a record sales month for many automakers as Fla. dealers avoid closing for Dorian
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September 09, 2019 12:00 AM

August sales sidestep storm blow

Vince Bond Jr.
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    Honda’s CR-V, shown, and Passport drove the brand’s 18 percent monthly sales increase.

    The Labor Day weekend rush pushed several manufacturers to monthly and all-time records in August, setting up the industry to post a strong third quarter after slogging through weakening demand in the first half of the year.

    Florida dealerships largely avoided major disruptions from Hurricane Dorian, which turned north as it neared landfall and instead brought wind and heavy rain to the Carolinas. Numerous stores in North and South Carolina started September by shutting down amid mandatory evacuation orders in some coastal areas.

    The Jeep brand had a sizzling August, setting a monthly retail sales record of 87,238 vehicles that topped its previous mark of 86,111 in May 2018. FCA US said the Gladiator and Grand Cherokee pulled the brand to a 6 percent improvement in retail sales from August 2018, according to an internal memo obtained by Automotive News. Total Jeep sales for August weren't available due to FCA's shift to quarterly reporting.

    American Honda, Nissan Group, Toyota Motor North America, Hyundai-Kia and Mercedes-Benz USA each posted double-digit gains in August.

    American Honda sales rose 18 percent, resulting in a record month for the Honda brand and its CR-V and Passport crossovers. Nissan Group posted a 13 percent gain and record August sales for the Kicks and Rogue crossovers. The Toyota brand rose 12 percent to record August volume, and the Hyundai brand, up 12 percent, had a record August for its revamped utility-vehicle lineup. Mercedes-Benz USA sales jumped 25 percent.

    Across the industry, U.S. light-vehicle sales rose 10 percent in August, the second straight month of higher volume, according to reported results and estimates from the Automotive News Data Center. August volume was helped by a fifth weekend, higher incentives and increased fleet shipments, analysts said.

    The July and August increases followed declines every month from January through June.

    Despite the impressive figures, "a clear interpretation of market strength is difficult" due to the Labor Day weekend period counting toward August this year rather than September as it did in 2018, said Charlie Chesbrough, senior economist for Cox Automotive.

    Incentive spending per unit grew 1.2 percent last month from August 2018, according to ALG. The data showed Honda making the biggest jump, up 16 percent to $2,236. "Honda was one of the fastest-growing brands," a Honda spokeswoman said in an email, "and because of this, a minor increase in our regional incentive spend does appear to have larger impact due to a lower starting point."

    Nissan Group's sales rose 13 percent, helped by the Rouge's record August.

    The spokeswoman said Honda incentives continue to be among the lowest in the industry.

    ALG said FCA incentives averaged $5,043 per unit, up 9 percent year over year, while spending by General Motors also rose 9 percent, to $5,133. Ford trimmed its incentive spending 6.9 percent to $4,415.

    "We are seeing a lot more [incentive] activity in terms of automakers adjusting their programs throughout the month, trying to see what works," said Autotrader analyst Michelle Krebs.

    Krebs said Hurricane Dorian may have pushed some would-be August sales into September as residents of the Southeast monitored the changing forecasts for the storm.

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    "August turned out to be stronger than we anticipated, and it may have been even stronger had it not been for the hurricanes," she told Automotive News. "That caused many dealerships in Florida to board up, and they missed the holiday weekend."

    IHS Markit analyst Stephanie Brinley said the industry is entering a time of year when incentives tend to be higher as dealers clear lots of older inventory and make way for the latest models. Before the recession, she said, automakers would focus on keeping plants running and throw in incentives if vehicles weren't moving, but the companies have been more disciplined in recent years.

    Hannah Lutz contributed to this report.

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