Sales of new cars and trucks dropped sharply in June, but the prices buyers paid remained elevated because they were competing for limited supplies.
While not every automaker has released its June sales numbers, enough of them have for industry experts to accurately project sales. Compared to June 2021, the numbers are sharply lower. Cox Automotive estimates that U.S. car sales came out to 1.2 million units, which is 7.5% lower than a year ago.
For the second quarter, which ended June 30, sales are expected to be down by 19.3% when compared to the second quarter of 2021. For the first half of the year, sales are forecast to be down 17.3% from the same period last year.
“Last June, I wrote that the concern about the supply situation could not be overstated, as we were in untested territory for the market,” said Charlie Chesbrough, senior economist at Cox Automotive. “That sentiment remains, as there has been no significant shift in the conditions on the ground since last fall. Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today.”
The average transaction price (ATP) of new cars and trucks remains high, closing in on $48,000. While automakers have urged dealers not to mark up prices over the sticker price, many are doing so. Carmakers attribute most of the decline in sales to fewer vehicles on their lots, not the prices.
Strong sales of EVs and hybrids
Toyota is among the automakers that are reporting final sales for June. The company said June sales were 17.9% lower than they were in June 2021, with daily sales falling 21.1%.
Not surprisingly, Toyota says its electrified vehicles were among its strongest sellers last month, representing 23.5% of total sales.
By comparison, Kia had a pretty good month, as sales declined by only 4.8% year-over-year. The company was helped by strong sales of the Sportage, which saw sales increase by 12% over May and 19.1% over June 2021.
‘Selling everything they can get’
U.S. sales of Hyundai vehicles declined by 12.9% when compared to June 2021, but the company said its monthly sales results were better than industry predictions that forecasted a 15.8% decline. Hyundai said it established a new retail sales record in June for Santa Fe and set new total sales records for Tucson HEV and Nexo.
"Hyundai's Q2 retail sales continue to highlight a terrific product mix, and consumer demand for our SUV lineup remains very strong," said Randy Parker, senior vice president, national sales, Hyundai Motor America. "Our dealers are selling everything they get, and we are continuing our efforts on growing market share."
Honda sales were bolstered by sales of electrified cars, with buyers snapping up Accord Hybrids. Sales of that model were up 39%. However, total sales were down more than 60% from June 2021, largely due to limited inventory.
“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," said Mamadou Diallo, vice president of Auto Sales for American Honda Motor Co.