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Signs Point to a Market Rebound

As automakers report second quarter results, analysts say a market rebound may be on the way.

July 6, 2022
Signs Point to a Market Rebound

 

Credit:

Creative Commons

4 min to read


The U.S. light vehicle market finished weak in the second quarter as global parts shortages and logistics issues constrain automaker outputs.

But there are signs that a market rebound is underway.

The seasonally adjusted, annualized rate (SAAR) of sales hit 13.22 million, a modest rebound from May's 12.81 million rate Motor Intelligence reported. Analysts forecasted a SAAR of 13 million to 13.8 million for June.

Still, the June SAAR, the second lowest of the year year, fell sharply from June 2021's 15.43 million pace.

Ford Motor Co. saw a sales gain of 32% in June, though the overall market dropped 11% during the month. Sales jumped 41% at Lincoln. This follows a decrease in Ford division volume year over year for four consecutive months a a decrease for 12 consecutive months for Lincoln.

Ford, which outperformed the market in June and the second quarter, cited the combined deliveries of the F-Series, Explorer and redesigned Expedition and Navigator SUVs as the reason why. These vehicles represented just over 56% of the automaker's total sales in June. Ford's car deliveries rose 62% to 4,651, with nearly all of those sales represented by the Mustang.   

Ford maintains consumer demand for new vehicles remains strong. Around 50% of its retail sales in June came from previously placed orders.

Ford reported a 51-day supply of vehicles at the close of June -- or 297,000 units, vs. 236,000 at the end of May and 162,000 at the end of June 2021.

Volume slid 15% to 578,507 in the second quarter at General Motors, to claim the U.S. sales crown from Toyota Motor Corp.

Deliveries dropped 11% at Chevrolet, 14% for GMC, 56% at Buick, and 6.7% percent at Cadillac from April to June. GM has seen four consecutive quarters of declining sales, though volume has increased over the last three quarters. Still, GM expects to gain market share for the third consecutive quarter.

The automaker ended June with 247,839 vehicles in U.S. dealer inventory, including cars and light trucks in transit to showrooms.

Chip shortages and other supply chain disruptions negatively affected GM's second-quarter vehicle wholesale shipments in June. GM has 95,000 vehicles assembled without certain components in storage until they are completed, which the automaker expects to occur during the second half of the year.

GM's U.S. sales dropped 18% over the first half of the year, though many of the company's most profitable vehicles fared better.

Toyota Motor reported an 18% drop in deliveries to 170,155 vehicles, with second-quarter volume falling 23% to 531,105. June sales dropped 18% at the Toyota division, the brand's 11th consecutive monthly decline, and 15% at Lexus, its fifth consecutive drop.

Some popular Toyota models saw double digital declines with the Camry, off 27%; Highlander, down 34%; and Tacoma, down 14%.

Stellantis sales dropped 16% in the second quarter, with double-digit declines for every brand but Chrysler, where deliveries surged 95% to 36,934 with a 143% gain in Pacifica volume. Deliveries fell 11% for Jeep and 27% for Ram in the latest period.

Honda Motor Co. saw June sales drop 54 percent with its Honda division down 54%, where car deliveries fell 61%, and Acura sales were off 55%. Honda brand volume has fallen for 11 consecutive months.

“With strong turn rates of up to 90% for core Honda and Acura products, it’s clear that success is a relative term in today’s business environment and sales volume is not the best measure of true customer demand,” Mamadou Diallo, vice president of auto sales for American Honda Motor Co., said in a statement.

Nissan Motor Corp. saw second quarter volume fall 39% to 183,171, its biggest decline over the last four quarters. The Nissan division was down 38% and Infiniti off 41%

Hyundai volume fell 13% and Kia volume, 4.9%. This marks the fourth straight monthly decline for both automakers, though Hyundai's volume, at 63,091 cars and light trucks, set a high for 2022, even with retail volume down 5.5%.

Subaru saw an end to a 12-month streak of declines with June sales of 43,175, up 0.7 percent. Mazda's U.S.  volume dropped 54% in June, the company's third consecutive decline. Second quarter Volkswagen sales slumped 34% to 78,281, with cars off 48%.

BMW volumes fell 18%, Audi’s fell 28%, and Bentley’s dropped 8.2%. Porsche bounced back after a 25% drop in first-quarter volume with a 2.8 percent gain in the second quarter. Genesis' deliveries rose for the 19th consecutive month with June volume advancing 11% to 4,506.

Volvo saw June sales decline 31%.  

Mercedes-Benz and Jaguar Land Rover will report second-quarter sales later in July.

Tesla is expected to post higher second-quarter and first-half sales.

 

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