The biggest Asian automakers in the U.S. posted double-digit sales gains last month in the latest sign that the market is picking up strength as the summer advances. Two of the Detroit 3 also posted big gains in volume last month, helped by fatter discounts and popular trucks and crossovers, according to Automotive News data center projections.
The seasonally adjusted, annualized sales rate for August came in at 17.07 million, well above forecasts of 16.5 million to 16.8 million, and up from 16.82 million in July and 17.01 million in August 2018. It's the fourth month this year the sales pace has hit 17 million or more, including three out of the last four months.
American Honda Motor Co. led the way with an 18 percent increase over year-earlier figures. Nissan Group advanced 13 percent, followed by Hyundai (12 percent) and Toyota Motor Corp. (11 percent). It was the first time in four years that each of the four big Asian companies were up more than 10 percent in a given month. All of them were aided by strong demand for light trucks.
Across the industry, U.S. light-vehicle sales rose 10.2 percent in August, the second straight month of higher volume, the Automotive News data center estimated. Deliveries were driven by five sales weekends that included the key Labor Day holiday, fatter incentives and higher fleet shipments, analysts said.
July’s estimated 1.2 percent gain marked the first time this year that sales rose – if estimates for the Detroit 3 are accurate. Starting in July, Fiat Chrysler joined Ford Motor Co. and General Motors in reporting on a quarterly basis.
Analysts said Ford was the only major automaker expected to generate lower sales last month as the company continues to largely exit the sedan market. August sales rose 20 percent at GM and 11 percent at FCA US, but dropped 3.1 percent at Ford, the Automotive News data center estimates.
“August sales are coming in hot as aggressive incentives lifted the market above our forecast," said Charlie Chesbrough, senior economist at Cox Automotive. "The surprisingly strong numbers may be misleading. Although the retail/fleet mix is not yet known, the strong performance of some vehicle lines suggests heavy fleet activity may have occurred for some brands."
There were 28 selling days last month, one more than in August 2018.
Company by company
At American Honda, deliveries jumped to a monthly record of 173,993, with volume up 20 percent at the Honda division -- reflecting record light-truck shipments and strong car demand -- and 0.8 percent at Acura. Honda also appeared to benefit from sharply higher incentives last month, ALG data show. (See chart below.)
At Toyota, sales rose 12 percent at the Toyota division and 4.6 percent at Lexus, which snapped a fourth-month streak of declines. The company said Toyota brand car sales advanced 8.4 percent and light-truck deliveries increased 15 percent to more than 143,000, a monthly record.
Nissan brand volume rose 16 percent but volume dropped 15 percent at Infiniti.
New and redesigned crossovers, along with strong retail growth, drove Hyundai to another gain in August, with volume increasing 12 percent for the second consecutive month. It was the brand’s 13th straight month of year-over-year gains.
Retail sales rose 11 percent in August, Hyundai said, marking the sixth time in the last seven months that the brand achieved year-over-year retail sales growth. Hyundai along with Kia were among the few automakers to reduce incentive spending in August, according to ALG data.
Retail deliveries of Hyundai crossovers totaled 34,844, a monthly record, with sales of the subcompact Kona rising 34 percent. Hyundai said August sales of the new, three-row Palisade crossover topped 5,000, exceeding company targets.
"Given this response we are working hard to increase dealer inventory to satisfy the tremendous demand” for Palisade, Randy Parker, vice president of national sales for Hyundai, said in a statement.
Strong crossover demand also helped Kia to a 13 percent gain last month.
Subaru sales rose 9.3 percent with August volume -- 70,039 cars and light trucks -- setting a monthly record and extending the brand's year-over-year increases to 93 straight months. At Volkswagen, another brand benefiting from an expanded crossover lineup, sales jumped 10 percent.
Another Asian brand, Mazda, also advanced. It snapped a 13-month losing streak with a 6.5 percent increase. The brand's volume is now off 12 percent for the year. Sales dropped 3.3 percent at Mitsubishi.
Among other luxury brands, volume rose 7.2 percent at BMW, 25 percent at Mercedes-Benz, 14 percent at Porsche, 3 percent at Audi and 187 percent at Genesis. August deliveries dropped 14 percent at Jaguar and 8.5 percent at Land Rover.
The sales increases came despite threats posed by Hurricane Dorian. Many dealers along Florida’s Atlantic coast shuttered or curtailed sales operations over the weekend as showroom traffic dwindled and to allow employees to prepare for the storm.
“Hurricane Dorian might have delayed some new vehicle purchases, but its overall impact on August sales appears to be fairly nominal,” said Jessica Caldwell, an analyst with Edmunds.
Healthy job gains and steady economic growth continue to support sales, analysts say, even as rising new-vehicle prices discourage some buyers.
U.S. sales were off 1.9 percent through July, based on Automotive News Data Center estimates, amid lower retail demand and stronger first-half fleet deliveries. With the August tally, volume has now slipped just 0.3 percent year-to-date, according to the Automotive News data center.
But sales have varied widely across the country. LMC Automotive says retail sales fell 2.4 percent through July, with retail demand down 1.1 percent in the northeast and flat in the southeast.
In the first seven months, retail deliveries fell 7 percent in the southwest, 5 percent in the northwest and 4 percent in north central and southern states.
Industry volume has topped 17 million four straight years but some analysts see that streak ending in 2019 as rising new-vehicle prices deter some consumers.
Incentive spending rose last month, with ALG estimating discounts averaged $3,825, up 1.2 percent from August 2018, with big gains in deals at GM, Honda and FCA . LMC and J.D. Power said incentives rose to $4,177 from $3,878.
- Days to turn, or the average number of days a vehicle sits on a dealer lot before being purchased, was 74 through Aug. 25, up from 67, J.D. Power said.
- The average interest rate on a new-vehicle loan, Edmunds said, remained under 6 percent for the second month in a row in August, at 5.8 percent, compared to 5.8 percent in July and 6 percent in June.
- The average down payment for a new vehicle dipped in August and came under $4,000 for the first time in more than a year, Edmunds said.
- Sales with zero percent financing constituted 6.1 percent of financed purchases in August compared to 5.8 percent in July, Edmunds said.
- Fleet deliveries last month are projected to total 217,600, flat with August 2018, J.D. Power and LMC said. Fleet volume is expected to account for 13.4 percent of total light-vehicle sales last month, down from 14.1 percent in August 2018.
“Consumers continue to shake off the political and trade turbulence because the economy remains on solid, if somewhat slowing, footing. This foundation, combined with higher fleet volume in the first half of the year, will keep the industry above 17 million units for a fifth year in a row.”
-- Jeff Schuster, president of global vehicle forecasts at LMC Automotive
" ... the potential for a big bounce in the fourth quarter remains, especially given the still inviting credit conditions, and sustained inventory and incentive levels from automakers."
-- Chris Hopson, manager of North America light-vehicle sales forecasting at IHS Markit
Editor's note: An earlier version of this story misstated the change in Infiniti's U.S. sales for August 2019 vs. August 2018.