The first half of 2021 was a bit like a tale of two cities as carmakers and dealers grappled with declining inventories and fewer vehicles to sell amid strong demand and brisk sales.
Carmakers such as General Motors, Toyota, Hyundai, Nissan and Volkswagen all reported big increases in sales compared to a year ago when the COVID-19 pandemic jolted the industry. This happened even as the availability of new models dropped. Subaru, one of the automakers reporting monthly sales results, said deliveries dropped last month due to tight inventories.
GM reported a second-quarter increase of 40% compared to year-ago results in what it described as “a unique market bolstered by strong customer demand but constrained by low inventories resulting from the global semiconductor shortage.”
“The U.S. economy is accelerating, consumer spending is robust and jobs are plentiful,” said Elaine Buckberg, GM chief economist. “Consumer demand for vehicles is also strong, but constrained by very tight inventories. We expect continued high demand in the second half of this year and into 2022.”
Kurt McNeil, GM U.S. vice president for sales operations, said, “The agility and creativity of our supply chain, purchasing, engineering and manufacturing teams, in collaboration with our suppliers and dealers, have helped us continue to satisfy customers and gain market share in some of the highest demand segments of the market.”
Nissan sales were up 68.1% for the second quarter, led primarily by its Nissan division, which was up 73.8 percent. The company is up 34.2% through the first six months of the year. It’s passenger car sales helped push those numbers higher, particularly Versa and Sentra which are up 108.3% and 77.8% respectively in the first half of 2021.
Toyota division’s June sales increased 41.6%. For the first half of 2021, Toyota division sales were up 44.1 percent. Lexus division posted a June sale increase of 29.1 percent. For the first half, the luxury unit’s sales were up 47.7%, TMNA reported.
Bob Carter, executive vice president of sales, Toyota Motor North America, said, “We are grateful to our loyal customers for their trust in the Toyota and Lexus brands. Our manufacturing team has been working tirelessly to deliver ever-better, safer vehicles to our 1,500 dealers across the country, and we appreciate their partnership to surpass our customers’ expectations.”
Good times keep on rollin’
Hyundai Motor America reported total June sales of 72,465 units, a 45% increase compared with June 2020. This was the highest June sales total in Hyundai history and the fourth consecutive month setting a new monthly record.
“The dedication of our retail partners in delivering Hyundai vehicles with an outstanding consumer experience is paying off with even more sales records,” said Randy Parker, senior vice president, National Sales, Hyundai Motor America.
“Demand is going to grow,” Parker predicted during a phone interview, adding “the economy is very strong.”
Hyundai’s sales performance was bolstered by its strong passenger car line-up with 37% of vehicles sold last month being passenger cars and 11% alternative-powered vehicles, meaning plug-in hybrids or electric vehicles.
Volkswagen reported a 72% sales increase in the second quarter and noted 73% of its total sales were utility vehicles. Porsche followed parent company VWs’s lead, reporting a 55% sales increase.
Mitsubishi Motors North America also reported strong second quarter sales of 25,146, a 106% increase compared with Q2 of 2020. First-half sales of 53,377 were up nearly 12% over the same period last year, as the brand focused on retail sales of its highest-specification models to minimize the impact of the global chip shortage.
Not everything came up roses
Subaru, however, said its sales dropped as inventory in the hands of dealers declined. Subaru of America, Inc. today reported 42,877 vehicle sales for June 2021, a 20.5% decrease compared to June 2020 due to reduced inventory resulting from the global microchip shortage. For the second quarter, Subaru reported a 20.3% gain compared with the same period in 2020.
“Given our inventory at this time, we were pleased with the June sales results our nimble retailers worked hard to deliver, and we thank them for their efforts,” said Thomas J. Doll, president and CEO, Subaru of America Inc.
Although used car prices are expected to climb to record levels in the second quarter, Edmunds data reveals that new car prices appear to be leveling off — the average transaction price for new vehicles hit $40,827 in the second quarter of 2021, compared to $40,070 in first quarter and $38,895 for the same period in 2020.
Edmunds’ experts note this is due to a shift in the mix of vehicles available in the new vehicle market and signs of consumer resistance to the rising prices.
“Tighter inventory and fewer discounts in the new car market are pushing shoppers to seek a reprieve in the used market, and this consumer behavior is what’s also driving used car prices to astronomical levels,” said Jessica Caldwell, Edmunds’ executive director of insights.
“Car shoppers are used to getting deals, and often far below the sticker price for new, so anyone returning to the car market for the first time in a while is in for some serious sticker shock.”