Crossovers, retail demand drive Hyundai to 6% gain

An expanded crossover lineup and 19 percent increase in retail deliveries drove Hyundai to another U.S. sales gain in November with volume rising 6 percent to 60,601 units. The brand’s sales have increased 15 out of the last 16 months.

Hyundai said its retail gains last month were led by four core crossovers: Santa Fe (up 26 percent), Tucson (up 31 percent), and Kona (up 39 percent), and demand for the new three-row Palisade crossover, with more than 5,000 retail units, a 21 percent increase over October. The all-new, entry-level Venue crossover made its sales debut with 290 deliveries last month.

Hyundai said fleet shipments fell 33 percent in November, representing 15 percent of total volume.

Overall, industry sales are forecast to rise slightly in November, according to J.D. Power-LMC and ALG forecasts, helped by an extra sales day and weekend, heavy holiday promotions and rising incentives that reached record levels during the month.

Other non-U.S. automakers will release November sales results later today. General Motors, Ford Motor Co. and Fiat Chrysler Automobiles report U.S. sales results on a quarterly basis; Tesla releases global deliveries once a quarter.

Cox Automotive expects deliveries to drop slightly, though strong fleet sales could result in an overall gain.

“GM fleet activity, and likely some retail, was significantly lower in October by tens of thousands of units as factory closures disrupted deliveries,” said Charlie Chesbrough, senior economist at Cox Automotive. “The question for the market [in November] is whether these sales were simply delayed, replaced or canceled.”

Industry sales slipped 1.8 percent in October for a 1.6 percent decline through 10 months, the Automotive News data center estimates. Higher fleet deliveries have offset a decline in retail volume in 2019.

SAAR outlook

The seasonally adjusted, annualized rate of sales is forecast to come in at 16.9 million to 17.5 million, a rebound from October’s 16.55 million pace hampered by a 40-day strike at GM. The SAAR tallied 17.5 million in November 2019. The SAAR topped 17 million five of the first 10 months this year.

Incentive spending

J.D. Power and LMC estimate average incentive spending was on pace to reach $4,538 per vehicle last month, an increase of more than 12 percent from November 2018 and the first time discounts topped $4,500.

ALG estimates average November incentives rose 1.2 percent to $3,759, with the biggest discounts among major automakers offered by the Detroit 3, Daimler, BMW and Nissan. Many Honda dealers dangled red-tag discounts on older new vehicles and Buick offered 20 percent off MSRP.

The increase in incentive spending is being driven by record levels of older-model vehicles still lingering on dealer lots, analysts say.

Discount spending on 2020 model-year vehicles was on pace to reach $3,723 in November, an increase of nearly 13 percent from a year ago, J.D. Power and LMC said.

Odds, ends

  • There were 26 selling days last month v. 25 in November 2018.
  • Incentive spending on cars is expected to rise by $454 to $4,185 while average discounts on trucks, crossovers, SUVs and minivans rose by $503 to $4,658, J.D. Power and LMC estimate.
  • Pickups, crossovers, SUVs and other light trucks accounted for 72.7 percent of new-vehicle retail sales through Nov. 17, the highest level ever for the month of November, J.D. Power and LMC said.
  • Days to turn — the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer — was 76 days through Nov. 17, up 6 days from a year ago, J.D. Power said.
  • Fleet shipments are expected to total 261,800 units, down 3.5 percent from November 2018, or 18 percent of total light-vehicle deliveries, down from 19 percent last year, LMC and J.D. Power estimate.

Quotable

 “The monthly selling rates for light vehicles have given mixed signals during the second half of 2019, but the overall level remains robust. Volatility has replaced the typically strong selling rate pattern of the last five years. Other factors, such as increasing incentive levels and the ongoing trend of higher transaction prices, are adding to the existing uncertainty around trade.”
    —  Jeff Schuster, president of global vehicle forecasts at LMC Automotive