Hyundai and Kia posted record sales in August, driven by robust demand for crossovers and hybrids, making it one of the industry’s strongest months of the year.
Hyundai reported a 22% increase in deliveries, totaling 79,278 units, while Kia saw a 4.3% rise, with 75,217 units sold. This marks the second consecutive monthly gain, with hybrid models showing an impressive 81% growth, particularly the Santa Fe, up 120%, and the Tucson, up 97%. Fleet sales accounted for 7% of Hyundai’s August volume, translating to roughly 5,550 units.
Kia also experienced a surge in crossover deliveries, which jumped 9%, and EV sales, which increased by 27%, driven by the new EV9 three-row crossover. Additionally, Kia’s plug-in hybrid sales climbed 43%, contributing to an overall 9% increase in electrified vehicle deliveries. Eric Watson, Kia America’s Vice President of Sales Operations, attributed the success to effective management of inventory shortages and proactive marketing and sales strategies.
However, despite these gains, Kia’s year-to-date sales are down 2.3% at 525,257 units due to disruptions from a computer outage at dealers on CDK’s dealer management network in June and July. Genesis, Hyundai’s luxury brand, also rebounded with a 15% increase in August sales, setting a record of 7,386 units, with crossover deliveries reaching an all-time high.
Moreover, the U.S. auto industry as a whole is projected to see a 7 to 8% rise in sales for August, according to estimates from Cox Automotive, S&P Global Mobility, and J.D. Power/GlobalData. This growth is supported by a combination of extra selling days, Labor Day discounts, and rising inventory levels. The seasonally adjusted annualized rate (SAAR) of sales is forecasted to reach between 15.2 million and 15.4 million units, which is in line with last August’s rate but down from July’s pace of 16.04 million.
Incentives have also played a crucial role in driving sales, with the average incentive per vehicle rising nearly 60% from August 2023 to $3,035 last month. Increased lease discounts, especially on 2024 electric vehicles, have contributed to this trend, with leasing accounting for 24.2% of August retail sales, up from 20.4% a year earlier.
Meanwhile, inventory levels continue to climb, with new-car and light-truck supplies reaching 2.91 million vehicles in mid-August, up from 1.96 million a year earlier. However, some brands like Honda, Lexus, Toyota, and Subaru still face lean inventory levels, limiting their sales potential. In contrast, brands like Ram, Dodge, Jeep, Lincoln, and Volvo have a higher supply of new vehicles.
Average transaction prices for new vehicles are declining, driven by rising incentives and improved availability of lower-priced models. The average transaction price in August was on pace to total $44,039, down 4.1% from August 2023 and well below the record high of $47,329 set in December 2022. This downward trend in pricing is further supported by reduced fleet sales and lower interest rates on new-vehicle loans, which averaged 6.87% in August, down slightly from a year earlier.
