Toyota, Ford, Honda sales rise as market rebounds 17% in August

U.S. light-vehicle sales rose again in August at Toyota Motor Corp., Ford Motor Co., Honda, Hyundai, Kia and Mazda, helped by the industry's highest inventory levels in two years and increasing incentives that are helping to offset rising consumer interest rates.

The overall market rose 17 percent to 1.33 million last month, GlobalData said in a preliminary report Tuesday, with retail sales of 1.099 million and 230,000 fleet shipments. Analysts expected August sales to rise between 15 and 20 percent year over year.

The seasonally adjusted, annualized rate of sales for August tallied 15.17 million, Motor Intelligence said, below forecasts and down from July's 15.9 million pace but far above the August 2022 SAAR of 13.4 million.

GlobalData suggested August sales were adversely affected by extreme weather in southerm California and Florida, two of the nation's biggest markets, as well as consumers that held out for Labor Day holiday deals, which will be included in September's results. In another sign the market cooled in August, GlobalData said the daily selling rate dropped to 49,200 last month from 52,200 in July.

Volume rose 15 percent at Toyota Motor, with sales up 16 percent at the Toyota division and 9.4 percent at Lexus. The automaker's gains were driven nearly all by a 21 percent increase in light-truck deliveries.

Toyota Motor said it ended August with 174,567 light vehicles in U.S. stock, or a 24-day supply, with 50,936 units on the ground at stores and 123,631 at ports or in transit. The Toyota brand had 142,257 vehicles in stock, or a 23-day supply, to start September while Lexus has a stockpile of 32,320 cars and light trucks, or a 37-day supply.

Ford Motor Co. said its August sales rose 2 percent, behind a 10 percent increase in pickup deliveries, with volume rising 2 percent at the Ford division and 3.1 percent at Lincoln. Ford brand sales have climbed nine consecutive months now while Lincoln posted its fourth monthly gain of 2023.

Ford's top-selling crossovers and SUVs had a mixed month: Explorer, down 51 percent; Escape, up 26 percent; Bronco Sport, up 70 percent; Bronco, up 20 percent; and Mustang Mach-E, down 21 percent.

Ford said it ended August with U.S. gross vehicle stocks of 383,300, up from 359,100 at the start of the month.

Honda Motor Co.'s sales, hampered by chronic chip shortages for most of 2022, continue to rebound sharply, with August volume surging 57 percent.

Deliveries rose 56 percent at the Honda division and 61 percent at Acura, even as the company continues to face what it calls "industry logistics and supply issues." It singled out the redesigned Pilot as one model still constrained by tight supplies, though U.S. sales of the crossover topped 10,000 in August.

Honda ended August with 31,900 new new vehicles on the ground, down from 32,000 to start the month but up from 13,700 heading into Sept. 2022. Acura finished August with about 17,678 vehicles on the ground, slightly from 17,400 at the start of the month and a sharp increase from 3,089 on hand heading into Sept. 2022.

August was the 13th consecutive month of U.S. sales gains for Kia and Hyundai.

Hyundai Motor America said U.S. sales during the month improved 1.1 percent to 65,046, while Kia America reported a gain of 9.2 percent to 72,147.

Hyundai's luxury brand, Genesis, said sales during August surged 27 percent to 6,453 vehicles.

The Hyundai Kona subcompact crossover led the way with a 71 percent gain to 5,777 deliveries. The Santa Fe and Tucson both recorded double-digit hikes. Among decliners, the Elantra fell 21 percent, and the Palisade slipped 26 percent.

August U.S. inventory for Hyundai was 53,075 vehicles compared with 47,836 in July. Inventory in August 2022 was 19,209, the company said.

Kia's results were paced by surging sales of the Niro compact crossover with 3,896 deliveries and the Carnival minivan with 5,428. Kia Soul sales slipped 23 percent to 4,911.

“Exceeding 70,000 units for four consecutive months and doubling year-over-year sales of our electrified offerings is proof that Kia is ahead of the competition and delivering highly desirable and innovative models across many of the industry’s largest segments,” Eric Watson, vice president of sales operations at Kia America, said in a statement. “Kia’s electrified offerings combined with our rugged and capable SUVs have strategically positioned the brand to not only increase our EV market share, but further establish ourselves as the leader in innovative mobility.”

Subaru, meanwhile, posted its 13th consecutive monthly sales gain with August volume rising 13 percent to 56,407 behind stronger deliveries of the Forester, Legacy and Outback.

Mazda's August U.S. sales advanced 19 percent to 30,174, giving the automaker its 11th straight monthly gain. The company's car sales rose 17 percent and light-truck volume rose 19 percent last month. Volvo said August sales rose 31 percent.

The August results from several automakers is another sign of recovery for an industry that was severely inventory constrained a year ago.

“The supply recovery continues to improve across the country, and this is leading to the market’s sales gains this year," said Charlie Chesbrough, senior economist at Cox Automotive, who noted that with improved supplies, sales incentives have also worked their way back into the mix.

Inventory restocked

Consumers responded to the highest inventory levels in almost two years by buying new vehicles in August at a pace up sharply from a year earlier, when stockpiles were far leaner, and despite higher interest rates, according to industry analysts.

The main driver behind the stready rebound in retail and fleet volume is more inventory. Compared with last year, dealers have about 70 percent more new vehicles on their lots available to sell than they did at the same point in 2022, when inventory levels were just starting out on what has turned into a sustained recovery.

Chesbrough said increased interest rates and higher pricing "remain strong headwinds against a more robust vehicle market.”

Those headwinds may be intensifying, said Chris Hopson, principal analyst at S&P Global Mobility, who noted that the daily selling rate metric was likely to fall below the 50,000-vehicle mark in August for the first time since February, though it’s not expected to slide much further.

“New-vehicle affordability concerns will not be quick to rectify,” Hopson said. “Rising interest rates, credit tightening and new-vehicle pricing levels slowly decelerating remain pressure points for consumers.”

Fleet sales were expected to total 245,785 vehicles in August, up 46 percent from August 2022, J.D. Power said. Fleet volume was expected to account for 18 percent of total light-vehicle sales, up from 14 percent a year earlier.

Jeff Schuster, group head and executive vice president for automotive with GlobalData, said his firm had to back down its initial projections for August sales as the month progressed."There has been some weather-related disruption, but we did pull things down a bit from where we were tracking the first two weeks of the month," Schuster said. "The resilience is still there; consumers are still grabbing anything they can that's not tied down at a dealership, and the deals are still minimal out there. But we could be getting to the point where consumers are getting frustrated" with pricing.
 

Average prices fall back

The average new-vehicle retail transaction price in August is expected to reach $45,537, down $566 from August 2022. The previous high for any month — $47,362 — was set in December.
 
Inventory

J.D. Power and GlobalData said retail inventory levels in August had risen to around 1.3 million vehicles, an increase from July and up 48 percent compared with August 2022. The figure was still well below pre-pandemic levels, however.

Cox Automotive said inventories were tightest at Honda, Kia, Toyota, Subaru, Lexus, Cadillac and Hyundai in August, while Chrysler, Dodge, Ram, Jeep, Infiniti and Buick had the largest days' supplies of inventory.
 
Incentives

Average incentive spending per vehicle in August is expected to reach $1,902, up from $953 in August 2022. Spending as a percentage of the average sticker price is expected to increase to 4 percent, up 1.9 percentage points from August 2022, per J.D. Power.
 
Odds, ends

• The average interest rate for new-vehicle loans was expected to increase to 7.3 percent in August, up 1.82 percentage points from a year earlier.
• Retail buyers are on pace to spend $47.8 billion on new vehicles, up $5 billion from August 2022, J.D. Power estimated.

 
QUOTABLE

"We're still seeing demand that has existed, and that pent-up demand is still there. But we could be getting to the end of that. The UAW negotiations could throw a wild card into the remainder of the year. If we go the route of not a lot of disruption, I would expect this pattern to continue through the end of the year."
— Jeff Schuster, group head and executive vice president for automotive with GlobalData

Philip Nussel contributed to this report.