Despite predictions of lean sales in July because of a continuing vehicle shortage, several carmakers report their sales last month were just fine.
In fact, Kia America reported a record July, moving more than 70,000 vehicles during the month. Kia also had the best first-half year sales in company history, propelled by strong demand for the K5, Sportage, and Telluride models.
July sales were up 34% compared to July 2020. Carnival MPV posted its fourth consecutive month-over-month increase, marking the model's highest monthly sales performance since it was introduced.
"Kia continues to build on the momentum from our record-breaking first-half by setting yet another record," said Sean Yoon, CEO of Kia North America and Kia America. "Kia sold more than 74% of our available inventory in July as compared to 34% during the same period last year, a solid reflection of the strong consumer interest in the brand."
Vehicle shortage has reduced sales
It could also be an indication of the vehicle shortage that has plagued dealers and frustrated consumers for more than a year. But the shortage didn’t slow Mazda, which reported its second-best July ever with sales of nearly 33,000 vehicles. The Mazda CX-30 recorded its best July with sales of 5,598.
Kia and Mazda may be outliers. Cox Automotive suggests most automakers will report lower sales, not because of a lack of consumer demand but because they can’t produce enough cars. Cox analysts predict the July sales pace to fall to 15.2 million, down from June’s 15.4 million.
“Sales pace has really been falling throughout the month – and quickly,” said Charlie Chesbrough, senior economist at Cox Automotive. “The estimated sales pace of 15.2 million in July is the slowest pace since last August’s 15.1 million, and if inventory levels do not improve, we could see the pace drop even more.”
Automakers have not been able to catch up to demand after shutting down production plants for several weeks last year. A lack of vital computer chips has also halted the production of some models with no prediction of a return to normal.
Challenges for consumers
For consumers, fewer vehicles to meet high demand means finding and buying their next vehicle may be a challenge. For example, it may be hard for buyers to find the exact vehicle they want, in the specific color and trim package they desire.
Because dealers have so few cars to sell they’re sticking close to the sticker price. In fact, the average transaction price (ATP) for a new vehicle in June was nearly equal to the manufacturer’s suggested retail price.
“This combination of hard-to-find vehicles and higher prices is slowing the auto market, and there is little change expected over the next few months,” Cox said in its forecast.