Toyota Motor, Hyundai, Subaru, Kia and Mazda posted higher U.S. sales in January behind strong crossover and SUV demand, signaling light trucks and retail business continue to fuel the market's recovery amid the pandemic.
The seasonally adjusted, annualized rate of sales for January tallied 16.9 million, Morgan Stanley said Feb. 3, well above estimates of 15.9 million to 16.4 million from Cox Automotive, TrueCar and J.D. Power and Associates.
The latest sales pace is down slightly from the 17.05 million rate in January 2020 and well above December's 16.38 million tally, and the fourth month the SAAR has topped 16 million in the last five months, indicating a sustained rebound.
Total industry deliveries decreased 3.3 percent in January, Morgan Stanley analyst Adam Jonas said. U.S. light-vehicle sales were forecast to drop 3.7 percent to 4.9 percent in January, Cox Automotive, J.D. Power and LMC estimated, with strong retail demand offset by ongoing weakness in fleet business.
Among auto makers reporting monthly sales, Ford Motor Co. dropped 8.6 percent on sharply lower car volume, with deliveries off 8.4 percent at the Ford division and 12 percent at Lincoln, though overall retail business climbed 5.5 percent. The company's car deliveries slumped 57 percent, reflecting discontinued models, notably the Ford Fusion and Lincoln MKZ, while SUV and crossover volume rose 7.6 percent and trucks dipped 8.6 percent.
Honda Motor Co. deliveries dropped 9.3 percent—with volume off 9.4 percent at the Honda division and 7.9 percent at Acura—on a 19 percent decline in overall car sales and a 2.2 percent dip in light-truck deliveries.
At Toyota Motor, volume edged up 0.2 percent last month, with sales rising 0.2 percent at the Toyota division and 0.1 percent at Lexus. The company's light-truck deliveries rose 8.6 percent while car demand skidded 15 percent.
While sales of the core RAV4 and Highlander fell last month, demand for the new Venza hybrid, as well as higher 4Runner volume, helped the Toyota division's crossover and SUV deliveries advance 7.9 percent to 68,128 for the month.
Hyundai's U.S. sales rose 1.5 percent to 43,394 in January behind an 11 percent increase in retail demand for crossovers.
Overall, retail deliveries edged up 1 percent and fleet volume increased 12 percent last month, Hyundai said. Strong retail demand for Hyundai's expanded crossover was driven by the Santa Fe, up 45 percent; the Venue, up 34 percent, and the Kona, with retail sales up 9 percent.
The latest gains came even as Hyundai dials back on incentives, with TrueCar estimating the brand's January spiffs at $2,281 a vehicle, down 26 percent from a year earlier. (See chart below.)
"We are off to a strong start to the year and remain optimistic for continued sales and market share gains in 2021," Randy Parker, senior vice president for national sales at Hyundai Motor America, said in a statement.
Subaru set a January sales record with deliveries rising 0.2 percent to 46,400, on sharply higher Crosstrek deliveries. Volume rose 11 percent to 44,965—a January record—at Kia Motors, with the new Seltos and Telluride crossovers driving the gains.
At Mazda, sales rose 6.9 percent last month, with car and crossover demand each up about 7 percent.
Volvo sales surged 32 percent to 8,151 last month, behind strong demand for crossovers, led by the XC40, up 35 percent. The Swedish brand has now racked up eight consecutive months of year-over-year gains.
Genesis volume soared 102 percent to 2,823 deliveries, with the new GV80 crossover easily outselling combined sales of the luxury brand's three sedans.
Showroom activity likely slowed in the final days of January, Cox Automotive Chief Economist Jonathan Smoke said Wednesday, as consumer sentiment waned and severe winter weather hobbled major Midwest and Northeast markets.
Industry volume is expected to continue rebounding in 2021, with sales forecast to come in at 15.5 million to 16 million for the year, based on projections from analysts, NADA and some auto makers.
While low interest rates, favorable credit conditions and demand for popular new light trucks are driving retail sales, short-term headwinds include a choppy economic recovery from the pandemic, production bottlenecks caused by a microchip shortfall and rising transaction prices that are squeezing some buyers out of the new-vehicle market.
"Thin inventories remain a reality for many dealers and consumers, a result of COVID-19 production disruptions, although the worst inventory issues are in the rearview mirror," Cox Automotive said last week. "Other risks to auto sales include large waves of COVID-19 cases during the winter and a second dip in the economy."
Cox Automotive senior economist Charlie Chesbrough said an "expected month-over-month uptick in the sales pace suggests the vehicle market is starting the year on solid ground even with so much uncertainty in the economy."
Overall, car and light-truck volume fell 14 percent last year to 14.6 million, the lowest tally since 14.49 million in 2012, when the economy was still rebounding from the 2008-09 financial crisis.
The average incentive on a new vehicle was tracking at $3,639 last month, a decrease of $510 from Jan. 2020, J.D. Power said. TrueCar estimates January spiffs averaged $3,839, down 7.5 percent from a year earlier.
There were 24 selling days last month vs. 25 in January 2020.
The average number of days a new vehicle sat on a dealer lot before being sold in January was on pace to fall to 51 days, down 19 days from last year, Power said.
Fleet deliveries are expected to total 182,300 last month, off sharply from January 2020, and account for 17 percent of all light-vehicle volume, down from 22 percent a year ago.