Light vehicle sales came raging back in May fueling signs of a rebound. But will the rebound run out of gas as inventory issues plague the industry?
Automakers reported impressive monthly results, showing increases that ranged from 40% to 70% compared to unit sales during the pandemic. Subaru was the only automaker posting weaker results in May.
Toyota Motor reported a rebound as its U.S. sales skyrocketed 47% in May and car sales nearly doubled. The Toyota division saw a 47% volume increase and the Lexus division a 49% increase. Toyota light truck sales continued their upward trajectory, rising 30% in May after soaring 170% in April.
The company’s total volumes were 9% higher than pre-pandemic levels in May 2019.
But inventory supply issues tarnished the bright results, with Bob Carter, executive vice president for sales at Toyota North America, warning of just an 8-day inventory supply for Toyota and a 12-day inventory supply for Lexus, as reported to Automotive News.
Honda Motor Co. sold 176,815 units in May 2021, up 46.2% over May 2020. Acura brand reported a 76% increase in deliveries while Honda brands saw a 43% increase. The company delivered 93,362 light trucks, an all-time record.
Hyundai Motor America and Kia Motors America also saw significant increases of 59% (93,745 units) and 75.3% (80,298 units) respectively. Hyundai reported retail demand rose to a monthly record in May at 84,351 units, representing a 54% gain. The automaker also saw a 95% boost in fleet shipments at 5,400 units.
Subaru reported an 8.8% volume increase at 56,558 units and indicated that the global microchip shortage continues to affect production and inventory levels.
Volvo Cars USA reported deliveries of 13,221 units up 38.9% over May 2020 levels. Genesis sales skyrocketed 176.1% moving from 1,350 vehicles to 3,728. The company sold 2,037 units of its GV80, a monthly record.
After posting a gain in 2020, Mazda continued its upward trajectory with a 69% increase in volume to 42,187 units in May.
J.D. Power/LMC, TrueCar and Cox Automotive report they expect the seasonally adjusted, annualized rate of sales for May to come in between 16.2 million and 16.7 million, after Ford Motor Co. releases its May results.
J.D. Power/LMC also predict record retail demand for May at 1.39 million light vehicles, representing a 34% increase over May 2020.
But automakers may struggle to maintain this sales pace in coming months as the microchip shortage forces them to idle assembly plants.
Dwindling inventory supplies already plague the industry. New vehicle supplies totaled 1.95 million in mid-May, down from 2.24 million at the end of April and down 42% from May 2020, reported Cox Automotive vAuto data.
J.D. Power finds the average number of days a vehicle sits on a dealership lot before being sold is over half what it was a year ago in May. Vehicles sat on a dealership lot for 47 days in May 2021, compared to 95 days in May 2020.