August thankfully saw some signs of recovery in North American automotive sales. However, there is still a long way to go in order to return to pre-pandemic levels.
Auto sales have recovered more and more each month, but overall remain down compared to 2019. Major automakers such as Toyota, Hyundai, Mazda, and Subaru all posted August sales that were down compared to the same period a year ago.
Several outside factors continue to hurt sales figures. Last month, there were two fewer sales days compared to August of 2019. That’s because sales over Labor Day weekend were technically included in August figures last year. In 2020, they will be counted in September. Overall, sales in August were down 11% compared to August 2019, according to estimates from industry forecaster ALG. In July, the decline was 15% year-over-year.
Everyone Is Struggling
Tight inventory levels across the industry continue to be a problem too. Toyota, Lexus, and BMW all had inventories of less than 40 days. Normal levels are around 60 days. However, many automakers have struggled to resume full production in an era of COVID-19 safety regulations. Toyota saw sales fall 22.7%. Honda posted an overall sales decline of 21.9%. Acura had sales drop by 10.2%. As you can see, the problem is affecting the entire industry.
Sales at Hyundai, which dropped 8.4% in August, were at least cushioned by the increasing popularity of the Palisade and Kona SUVs. Similarly, Kia saw sales fall 6.1% in August. At least their popular Telluride increased in sales. The Kia Seltos also sold well in the month.
Subaru sales declined 17.4% year-over-year. However, August was actually the best sales month in 2020 for them. Sales of the popular Forester SUV were up 1.1% compared to last year. Mazda had sales fall 5.1% compared to August 2019, with the CX-5 and CX-9 showing the smallest declines in the lineup.
New Cars vs. Used Cars
With record unemployment numbers and more financial uncertainty than ever, it’s no surprise that car sales are down. While new car sales have dropped, the used car industry has actually flourished a bit. Those who are still in need of a vehicle are currently more likely to choose a gently used model — at a much lower cost. The market has been helped along by car rental companies struggling financially. In response, they have flooded the used car market with hundreds of thousands of their rental fleet vehicles. The increase in supply and drop in demand has seen used car prices reach new lows in some sectors.