Hyundai sales down 9% in a skewed November

Hyundai Motor America’s sales fell 9 percent to 55,171 vehicles in November, a month in which a fluke of the calendar will make the softening market look worse than it is.

The South Korean automaker’s U.S. retail sales were down 11 percent. However, deliveries rose 4 percent on a daily selling-rate basis, while retail was up 1 percent. Crossover volume, propped up by the Palisade and Venue, was up 9 percent. Cars fell 31 percent.

Light-vehicle sales in November probably fell 12 percent, according to TrueCar and ALG. It projects that Ford, Fiat Chrysler, Honda, Nissan, BMW, Mercedes-Benz and the Volkswagen Group will all report sales declines of 15 percent or more.

“It’s going to look awful — like things have gone backwards pretty terribly — and that’s not the case,” said Tyson Jominy, vice president of data and analytics at J.D. Power.

Not as bad as it looks, but not great. Based on the first 17 days of the month, J.D. Power and LMC Automotive projected a 15 percent plunge in total light-vehicle sales. Adjusted for the number of selling days — three fewer than in November 2019 — the drop is more like 3.5 percent, with the more lucrative retail sales slipping only 0.7 percent.

With supply limited, pricing is up. The average new-vehicle retail transaction price last month was expected to reach a record $37,099, J.D. Power and LMC projected. That’s 0.9 percent higher than the previous record, set in October.

November had just 23 selling days this year — the lowest number possible in a month, and a quirk that only occurs on the calendar every five years or so — compared with 26 a year ago.

When adjusted for selling days, the market was expected to be down 3.5 percent to 7 percent. The SAAR for November was forecast to come in at 15.8 million to 16.4 million, according to estimates from Cox Automotive, TrueCar/ALG and J.D. Power/LMC, down from 17 million in November 2019.

Ford Motor Co. said it would release its November sales Wednesday. The second-largest U.S. automaker returned to monthly sales reporting in October after nearly two years of reporting quarterly. General Motors, Fiat Chrysler, Nissan Motor Co. and most European brands report only quarterly.

Below the seemingly dire top-line results, the retail auto market continues to recuperate from the spring shutdowns on stronger light-truck mixes and still-recovering dealer inventory levels.

Jominy said industry average transaction prices in November topped $37,000 for the first time, and were up 8.3 — or almost $3,000 from the same point a year ago. Part of that boost came from a heavier proportion of sales of more-expensive pickups, SUVs and other light trucks. Inventive spending declined about $800 per vehicle from a year ago, while dealer grosses per vehicle were up about $800 year-over-year, Jominy said. Combined, they account for more than half of the ATP rise.

True Car/ALG projected average transaction prices to be up 4.7 percent, or $1,707, from a year ago, and up 2.3 percent, or $838, from October 2020.

Sedan and coupe sales continued to lose market share in November compared with crossovers, SUVs and pickups, and now account for less than 22 percent of the overall market, down from 25 percent a year ago.

“We’re quickly approaching what I call the ‘Trident Line’ — where 4 out of 5 consumers choose a pickup or SUV over a car,” Jominy said, referencing the sugarless gum’s decades-old advertising tagline. “But cars never do well toward the end of the year; they are typically strongest in the first half.”

TrueCar/ALG projected retail sales to be up 2.9 percent year-over-year, and up 8.4 percent from October, on a selling-rate basis.

Fleet sales, especially to daily rental operators, have been a drag on sales overall since the COVID-19 crisis began, but are beginning to show their first hints of recovery, Jominy said. Commercial sales haven’t taken the hit that the travel-heavy rental industry endured, but as production has recovered at most automakers, more fleet orders are being filled. “We’re starting to see some signs of life from fleet,” Jominy said.

Product availability at dealerships has improved somewhat, according to Cox Automotive Senior Economist Charlie Chesbrough.

“The tight inventory situation, where available products at dealerships were drawn down to very low levels, reached a peak in late summer. However, factory production has improved while sales pace has slowed, and the combination is allowing dealerships to replenish somewhat,” Chesbrough said. “Overall, supply still remains far below last year’s levels, and holiday sales may slow if buyers can’t find what they want.”

Cox Automotive’s full-year forecast remains at 14.3 million vehicles, down 16 percent from 2019. Cox predicts retail will end the year down 9 percent, while fleet with finish down 42 percent.

The average number of days a new vehicle sits on a dealer lot is on pace to fall to 48 days, remaining below post-recession lows of 50 days for the second consecutive month, J.D. Power said.