Toyota, Ford, Honda, Hyundai sales advance as 'buoyant' economy drives market rebound

U.S. new-vehicle buyers are showing no fear of a possible recession.

A buoyant economy and improving stockpiles helped push light-vehicle deliveries up 15 percent to some 1.3 million in July, from depressed levels a year earlier, GlobalData said Wednesday in a preliminary report.

The seasonally adjusted, annualized rate of sales tallied 15.9 million last month, Motor Intelligence said, just within the range of forecasts of 15.9 million to 16.1 million, but up sharply from July 2022's rate of 13.47 million. The SAAR has now hit roughly 15 million or more each month this year.

"The outlook for the remainder of the year remains positive into 2024," said Jeff Schuster, head of GlobalData's automotive practice. "Resilience in consumer purchases remains the driving factor that is supporting the industry and the economy."

GlobalData said August inventories stand at 1.9 million light vehicles, up 14 percent over August 2022 levels, with days’ supply still suppressed at 36 but up from 28 days a year ago.

Toyota Motor Corp., Ford Motor Co. and Honda Motor Co. continued to rebound while U.S. sales rose for the 12th consecutive month in July at Hyundai and Kia, helped by rising inventories, higher retail and fleet business, and more generous discounts.

Toyota's July sales rose 8.1 percent to 191,684, with volume up 8.8 percent at the Toyota division and 3.3 percent at Lexus.

While the automaker continues to be hampered by some of the industry's lowest supplies of new cars and light trucks, July marked Toyota Motor's fourth consecutive monthly advance, the third straight increase for the Toyota brand and Lexus' sixth consecutive monthly gain.

Weaker results for three of Toyota's biggest sellers — Camry, off 9 units; Highlander, down 31 percent; and Tacoma, down 16 percent — were offset by higher sales of the Corolla, up 17 percent; Corolla Cross, up 58 percent; Sienna, up 57 percent; and 4Runner, up 46 percent.

Toyota Motor said it ended July with 154,541 vehicles in U.S. stock — 35,589 at dealers and 118,952 at ports or in transit — or just a 20-day supply. The Toyota division is starting August with a 19-day supply of new vehicles while Lexus has a 30-day supply.

Ford Motor Co. said Wednesday its July sales rose 6.1 percent, with trucks, up 15 percent, driving the gain.

Volume rose 6.6 percent at the Ford division but dropped 4.4 percent at Lincoln. Ford's top sellers posted mixed results during the month: F-Series, up 8.2 percent; Explorer, down 51 percent; Transit, up 81 percent; Mustang Mach-E, down 21 percent; Bronco Sport, up 70 percent; Escape, up 26 percent; and Bronco, up 20 percent.

Ford said its U.S. gross stocks ended July at 359,100, down from 409,000 at the end of June and 383,000 at the close of May.  

Honda Motor Co.'s deliveries rose 57 percent for the second straight month, with volume rising 53 percent at the Honda division and 99 percent at Acura. Honda's top sellers all posted major gains: Accord, up 145 percent; Civic, up 86 percent, and CR-V, up 52 percent.  

American Honda, citing "continued industry logistics and supply challenges," said it is starting August with about 30,000 Honda and 16,700 Acura vehicles on the ground. That is down from approximately 35,000 Honda and 19,000 Acura new vehicles at the start of July, but up sharply from 12,000 Hondas and 2,610 Acura models in dealer inventory a year ago.

The automaker has told dealers some shipments have been stymied by a shortage of rail cars in Canada, as well as trucks and drivers in the U.S.

Subaru's U.S. deliveries have now rebounded 12 straight months with July volume jumping 21 percent, led by sharply higher Forester and Outback sales that offset weaker Crosstrek demand.

Deliveries rose 9.7 percent to 66,527 last month at Hyundai, with retail volume edging up 2 percent to 61,745. Sales of Hyundai's top seller, the Tuscon crossover, rose 23 percent to 17,534, setting a July record.

Hyundai said it ended July with 47,836 cars and light trucks in U.S. stocks, up from 14,784 at the end of July 2022, but down slightly from 49,329 at the close of June.

Kia set a July sales record of 70,930, up 14 percent, with retail volume jumping 13 percent to 66,485. The results were boosted by a 72 percent in increase sales of electrified models and a 17 percent jump in deliveries of utility vehicles, the company said Tuesday.

Hyundai and Kia, like the rest of the industry, have hiked incentives in recent months as inventories rebound from historic lows that stemmed from chronic parts shortages. In the second quarter, U.S. discounts and marketing promotions at Kia and Hyundai rose to over $1,000 per vehicle from a year earlier, Motor Intelligence said, though they remain below most other mass-market brands. In July, Hyundai's incentives topped $2,000, Motor Intelligence said in a report released Tuesday.

At Genesis, July volume edged up 22 percent to 6,330, a monthly U.S. record, on higher sales of three utility models, the GV60, GV70 and GV80.

Sales rose for the 10th straight month at Mazda behind a 159 percent increase in car sales and a 23 percent rise in light-truck volume.

Volvo's July sales spiked 57 percent to 10,785, the company's third straight gain. Most of the rest of the industry reports U.S. sales on a quarterly basis.

The market, which rose 13 percent in the first six months of the year, continues to be supported by healthy pent-up retail and fleet demand that is offsetting higher interest rates, tighter credit standards and near-record vehicle prices.

"The first half of 2023 has proven once again that one shouldn't doubt the spending capacity of U.S. consumers," said Chris Hopson, principal analyst at S&P Global Mobility.

More analysts, citing a strong job market and easing inflation that has lowered the risk of a U.S. recession in recent weeks, have raised their outlook for U.S. sales in 2023 to more than 15 million.

"In the months ahead, we still expect improving vehicle production to cause inventories to steadily grow, eventually pressuring down pricing," Deutsche Bank analysts said in a report Monday. The bank, citing stronger than expected first-half volume and a sharp rebound in fleet business, raised its U.S. sales forecast for the year from 15 million to 15.2 million.

Retail inventory levels were expected to close July at around 1.3 million vehicles, flat with June but 64 percent higher than July 2022, J.D. Power and GlobalData said.

Toyota, Honda, Kia, Lexus, BMW, Subaru, Cadillac, Volkswagen, Hyundai, Land Rover and Chevrolet had the tightest supplies in July, Cox Automotive said, while Jaguar, Lincoln, Infiniti, Buick, Ram, Chrysler, Dodge, Audi, Mini and Jeep had the highest days' supply.

Among regions, Cox Automotive said supplies were lowest in Florida, while Denver, Detroit and Seattle enjoyed some of the highest days' supply.

The average incentive per vehicle in July was on track to hit $1,888, up 107 percent from July 2022, J.D. Power and GlobalData said, a reflection of growing inventories. Motor Intelligence estimated incentives and marketing promotions averaged $2,155 per new car and light truck last month, up 84 percent from July 2022.

The historically low incentives reflect smaller discounts on leased cars and light trucks, though J.D. Power and GlobalData noted deals on leased vehicles have risen in recent months. Leasing was expected to account for 20 percent of July retail sales, J.D. Power and GlobalData estimated, up from a low of 16 percent in September 2022 but still well below July 2019, when leased vehicles made up nearly 30 percent of all new-vehicle retail transactions.

Among the deals offered in July:

• Employee pricing and up to $6,453 off a 2023 Jeep Gladiator
• Up to $2,000 cash off a 2023 Jeep Wrangler Sport four-door
• 1.9 percent financing and no payment for 90 days on eligible Chevrolet models financed through GM Financial
• $4,500 in cash toward the lease of a 2023 Toyota Prius Prime and $6,500 cash toward the lease of a 2023 Toyota RAV4 Prime.
• Honda is offering 3.9 percent financing on most models on 24- to 48-month loans for qualified buyers; $1,000 cash for existing Honda owners who lease an Accord or Passport; and $1,250 toward a Ridgeline lease for existing and new customers.

• There were 25 selling days last month vs. 26 in July 2022.
• New-vehicle retail transaction prices in July averaged $45,305, down $866 from July 2022 and more than $2,000 below the record $47,362 set in December, J.D. Power and GlobalData said.
• Fleet deliveries were on track to tally 237,076 last month, up 61 percent from July 2022 on a selling day-adjusted basis, J.D. Power and GlobalData said, and fleet volume was expected to account for 17.9 percent of all light-vehicle sales, up from 13.5 percent a year earlier.
• The average interest rate for new-vehicle loans was expected to increase to 7.1 percent in July, 1.8 percentage points higher than a year earlier, J.D. Power and GlobalData said.
• Among nameplates, the Toyota Highlander, Honda CR-V Hybrid, Toyota Camry, Honda Civic sedan, Toyota RAV4 and Honda Accord had the lowest days' supply in July, Cox Automotive said, while supplies of the Ford F-150, Ram pickup, GMC Sierra 1500, Chevrolet Silverado, Ford Bronco Sport and Silverado HD stood at 60 days or more.