Hybrids, crossovers drive August U.S. sales gains, but SAAR drops

Toyota Motor Corp. snapped a two-month stretch of declines, and strong demand for crossovers and hybrids helped Hyundai and Kia post record sales in August, a month that could see the industry post its biggest volume of the year behind extra selling days and Labor Day weekend discounts.

Deliveries rose 13 percent to 796,555 vehicles among the seven automakers that report monthly U.S. sales results, according to the Automotive News Research & Data Center. The rest of the industry reports on a quarterly basis.  

Despite gains posted by those seven companies, the U.S. adjusted sales rate, or SAAR, fell to 15.1 million in August compared with 16.0 million in July and 15.5 million in August 2023, according to Motor Intelligence. The SAAR was forecast to reach 15.2 million to 15.4 million, according to previous estimates. The SAAR has remained above 15 million since January. 

Ford Motor Co. joined the hybrid parade last month. The automaker said on Sept. 5 that its U.S. sales rose 13 percent from August 2023, its largest gain in more than a year.

It sold 50 percent more hybrids and 29 percent more electric vehicles than a year earlier, while internal combustion volume improved 9.9 percent.

Ford sold 18 percent more pickups, with the Ranger nearly tripling, Maverick up 24 percent and F-Series up 12 percent. Explorer sales roughly doubled.

Deliveries by Ford’s Lincoln brand rose 49 percent on big gains for the Nautilus and Aviator crossovers.

Volvo said U.S. deliveries slipped 2.1 percent to 10,420 in August. The automaker noted, however, that sales of electrified models, which includes hybrids, increased 47.1 percent year-over-year and made up 38 percent of total sales. 

Sales rose for the 18th-straight month at Honda Motor Co. on record August light-truck volume and record deliveries of electrified models. The company reported sales rose 28 percent at the Honda division but slipped for the eighth-straight month at Acura.

Toyota Motor’s sales rose 1.9 percent last month, with the Toyota division down 1.3 percent and Lexus up 25 percent. Lexus sales have now increased 19 straight months, including back-to-back months of double-digit gains.

The automaker's performance was hurt in an unusual way by an ongoing stop-sale of the new Toyota Grand Highlander and Lexus TX three-row crossovers, both of which posted negative numbers in August as dealers repurchased recalled vehicles from consumers. It was the second consecutive month of negative results for the TX, but the first for the Grand Highlander.

Several other core Toyota models – the Corolla, RAV4, Highlander, 4Runner and Tacoma – also posted lower sales.

Toyota said its August sales of electrified models rose 49 percent to 94,509, or almost half – 48 percent – of its U.S. deliveries during the month, nearly all of them gasoline-electric hybrids.

Hyundai said deliveries jumped 22 percent to 79,278 last month, while Kia volume rose 4.3 percent to 75,217.

It was the second consecutive monthly gain for Hyundai. Hybrid models posted an increase of 81 percent last month, Hyundai said, led by two core crossovers, the Santa Fe, up 120 percent, and Tuscon, up 97 percent. Fleet represented 7 percent of August volume, or about 5,550 vehicles, the company said.

Kia said its crossover deliveries jumped 9 percent, while EV sales rose 27 percent, driven by the new EV9 three-row crossover. Plug-in hybrid volume increased 43 percent, with overall deliveries of electrified vehicles advancing 9 percent.

Eric Watson, vice president of sales operations for Kia America, credited effective management of "inventory shortages" and "proactive marketing and sales activities" for the latest results.

Kia's U.S. sales fell in June and July as a result of dealerships' outages from the cyberattacks on CDK Global's dealership management systems, and the brand's deliveries are now down 2.3 percent for the year at 525,257. 

Subaru reported a 12 percent gain in August sales, its 25th consecutive increase, behind record Crosstrek deliveries of 20,396, up 47 percent. Results for Subaru's other top sellers were mixed: The Outback was up 13 percent, while the Forester was down 12 percent.

Sales rose for the fourth-straight month at Mazda, with record August sales of 41,259, a gain of 37 percent and the brand's second-best month ever.

Genesis also rebounded after two monthly declines, with August volume increasing 14 percent to a record 7,386, with crossover deliveries at an all-time high.

U.S. auto sales were projected to rise 7 to 8 percent last month, based on estimates from Cox Automotive, S&P Global Mobility and J.D. Power/GlobalData. Average transaction prices are falling as inventory rises and incentives increase. August also had 28 selling days, one more than August 2023, and five weekends, including Labor Day weekend, traditionally a key period for promotions and sales.

"New vehicle affordability remains the biggest obstacle preventing further advances in the pace of auto sales," said Chris Hopson, principal analyst at S&P Global Mobility. "The current environment of still-high interest rates and slow-to-recede vehicle prices are translating to still-high monthly payments and little progress for new-vehicle demand."

The average incentive per vehicle rose nearly 60 percent from August 2023 to reach $3,035 last month, J.D. Power and GlobalData estimated. That was up $18 from July. Just 13 percent of new vehicles were projected to sell above sticker price last month, down from 31 percent in August 2023.

In another closely watched metric, the average discount's share of the window sticker was tracking at 6.2 percent last month, an increase of 2.3 percentage points from a year earlier and still well below the 10 percent level that's often seen as a tipping point for hurting brand values.

Increased lease discounts are also driving incentives higher, J.D. Power and GlobalData said, with leasing on track to account for 24.2 percent of August retail sales, up 3.8 percentage points from 20.4 percent in August 2023.

Jeep dangled up to $5,000 off or 0 percent financing on 2024 Grand Cherokee models in dealership stock, with payments deferred for 90 days.

Some of the biggest discounts in August, as high as $10,000 or more, were being offered on 2024 electric vehicles, Cox Automotive said.

American households, citing vehicle prices, battery range and charging infrastructure, are more hesitant about purchasing EVs, prompting automakers and dealers to hike discounts. Automakers have also delayed major EV programs.

J.D. Power said last week that battery-powered cars and light trucks will account for just 9 percent of industry deliveries in the U.S. this year, down from its previous forecast of 12.4 percent.

The popularity of gasoline-electric hybrids, aided by competitive pricing, is also undermining growth in EV sales.

EV sales will continue to grow “in a less predictable, more volatile fashion,” J.D. Power said.

EVs accounted for 7.6 percent of U.S. light-vehicle sales in 2023, J.D. Power said while projecting that EVs will account for 36 percent of U.S. sales by 2030.

New-car and light-truck supplies continued to climb, reaching 2.91 million vehicles in mid-August, Cox Automotive said, up from 2.79 million at the start of the month and 1.96 million in early August 2023. Automakers and dealerships had a 68-day supply of vehicles in mid-August, Cox Automotive said, up from 54 days a year earlier.

While inventory continues to rebound across the industry, lean stockpiles at some high-volume brands is limiting their sales, J.D. Power and GlobalData said. Honda, Lexus, Toyota and Subaru continue to have the leanest supply of vehicles, analysts say, while Ram, Dodge, Jeep, Lincoln and Volvo have the highest days' supply of new vehicles.

Toyota Motor said it ended August with 187,705 vehicles in stock, or a 27-day supply, with 76,254 at dealerships and 111,451 at ports or in transit. The company said it had a 29-day supply of light trucks and 21-day supply of cars to start September.

The Toyota brand has 156,074 vehicles on hand, or a 26-day supply, to start September, while Lexus inventory totaled 31,631, or a 30-day supply.

Because of the company's lean inventories, several Toyota dealers say some customers are waiting two to three months to take delivery of a new vehicle, especially hybrids.

American Honda said end-of-August U.S. stockpiles at the Honda brand totaled about 121,940 cars and light trucks, up from 31,849 a year earlier, while Acura inventory on the ground stood at 19,976, down from 24,567 a year earlier.

Average new-vehicle retail prices continue to fall as manufacturer incentives and dealer discounts both rise, J.D. Power and GlobalData said. Improved availability of lower-priced vehicles, designed to address the industry's affordability challenges, is also putting downward pressure on industry pricing.

Average transaction prices were on pace to total $44,039 in August, down $1,895, or 4.1 percent, from August 2023, J.D. Power and GlobalData, and well below the monthly record of $47,329 set in December 2022.

• Average incentive spending per vehicle on pickups, crossovers and SUVs in August was expected to be $3,234, up $1,254 from a year earlier, J.D. Power and GlobalData estimated, while average spending on cars was expected to be $2,242, an increase of $639 from a year earlier.
• Fleet sales were projected to total 228,202 in August, down 7.7 percent from August 2023, J.D. Power and GlobalData estimated, and fleet deliveries were expected to account for 15.9 percent of all total light-vehicle volume, down 2 percentage points from a year earlier.
• The average interest rate for a new-vehicle loan was expected to be 6.87 percent in August, down 0.36 percentage points from a year earlier, J.D. Power and GlobalData estimated.

— Philip Nussel and Nick Bunkley contributed to this report.