US light-vehicle sales rise 17% y/y in August, the best sales results in five years

US light-vehicle sales grew a robust 17% year-on-year (y/y) during August, again propelled by strong demand in the pick-up segment (up 18.7% y/y); light truck sales accounted for 51% of the August deliveries. Year-to-date (YTD) light-vehicle sales gained 9.6% y/y to 10.64 million units. Welcoming credit conditions and an ageing vehicle fleet should prevent a serious pull-ahead effect from the strong August. Supporting a strong close to the year, manufacturers have robust production schedules that will help vehicle supply, especially in anticipation of the new Toyota Corolla, Mazda3 and continued ramp-up of the GM family of full-size pick-ups.

Detroit automakers

General Motors' (GM) 15% gain was larger than Ford (12%) or Chrysler (12%). All of GM's brands saw double-digit gains, including Buick having its best August since 1989. GM saw a 15% increase in the pick-up market, less than the Ram's 29% or the F-150's 22%, transitioning outgoing GMT900 and incoming K2XX models. Crossover sales were up 34% and large sport utility vehicles (SUVs) up 29%; passenger cars deliveries were up 8%. GMC Terrain and Cadillac SRX reported their best-ever August sales, while Chevrolet Equinox and Buick Encore had best-ever months. Updated Malibu and all-new Impala saw massive gains (93% and 76%, respectively) in retail sales. Impala sales are down y/y, but the shift from fleet to retail is significant to the model's profitability and future prospects. Record monthly sales were achieved with Chevrolet Volt, Spark and Sonic, Cadillac XTS and Buick Verano. Buick's Regal, however, is down 29.5%.

Ford sales totalled 221,270 vehicles, up from 187,249 a year ago. Retail sales were up 20%, the best since August 2006. The Dearborn-based automaker said sales of its small cars – the Fiesta, Focus, and C-Max – jumped 30% y/y with 30,148 sold. Crossover utility vehicle (CUV) sales overall were flat y/y, as the brand's August gains were nearly even between cars (18.1%) and trucks (18.4%). Ford sold more than 70,000 F-Series full-size pick-ups for the second time in 2013, a 22.2% y/y jump. Lincoln volumes increased by 0.6%, with 8,192 sold.

Chrysler sales rose 12% y/y to 140,102 vehicles, marking its 41st straight month of y/y sales increases, and its best sales month since August 2007. Dodge Journey, Challenger and Dart and Jeep Wrangler, Compass and Patriot set August monthly sales records. Ram posted a 29% y/y sales increase, while Dodge was up 12% y/y. Chrysler's anaemic 2% gain was better than last month's decline; the Chrysler 300 saw a 27% y/y gain and its best sales since August 2007. The 200 was down 15% y/y and its Avenger sibling down 20%. Fiat managed a 1% increase, and its best month since the 500's launch. Jeep deliveries rose 8%, with Grand Cherokee and Compass showing 40% gains and Patriot a 42% gain.

Japanese automakers

With a 22.8% gain and 231,537 units sold, Toyota outsold Ford in August. Toyota has a goal of keeping Camry the top-selling US car for a 12th consecutive year in 2013, and sales of the mid-size sedan were up 21.8% y/y in August. Camry sales are 287,281 for the YTD, ahead of Honda's Accord with 256,926. Notable increases across Toyota's range include a 112.9% jump for the Yaris and the Avalon of 254.4%. The Prius line-up saw sales rise 29.6% y/y. Scion is down slightly (0.3%), while Lexus saw a 22.9% gain, largely on the IS (up 87.1%) and the RX (up 27.7%). Models that declines included Scion iQ and xB and Toyota FJ Cruiser and Land Cruiser.

Nissan sold 108,614 vehicles in August to deliver its best-ever retail sales month, passing the 100,000-unit mark for the first time. Nissan's Leaf continues to make inroads, the Altima (30,976) set an August record, and the Rogue is about to be replaced, but still set an August sales record. The Pathfinder saw another huge increase, up 258.4% and set an August record of 8,859 units sold. Sales at the Infiniti luxury brand were up 6.5%. Infiniti's SUVs were up 15.5% in August, and the all-new Q50 sedan delivered 2,434 units.

Honda's sales also grew 22.2% y/y to 166,432 vehicles. Accord sales climbed 6.7% y/y to 38,559 units to mark the sixth consecutive month sales exceeded 30,000. Civic sales were their highest since 2009, selling 39,458 units in August. The CR-V broke its all-time best sales month, set in March 2012, with 34,564 deliveries. On the Acura side, sales fell for all of the cars, but RDX was up 49.7% and MDX up 17.1%, setting an all-time sales record of 6,499 units. Acura's light truck sales set a record for the second month in a row and enabled the brand to report a 5.1% gain for August.

Mazda also reported its best August sales in ten years, selling 28,106 units for 26.4% growth year over year. The CX-5, up 82.3%, and the Mazda6, up 166.9%, continue to be bright stars in the line-up.

Strong Forester, Outback and Impreza demand supports Subaru. Although the Outback is Subaru's second-best seller, sales fell 9.9%, more than offset by an 89.2% gain by the Forester and 43.8% gain by the Impreza. Subaru remained the top industry gainer with sales of 41,061, units, a 45.1% y/y jump.

Other automakers

August sales at Volkswagen (VW) fell y/y by 1.6%, although VW Group sales grew by 4.0%; Audi was the Group's strongest performer in August, up by 22%. Combined sales for Hyundai and affiliate Kia, which operate separately, totalled 118,126 last month, up 6.3% y/y. Deliveries for the Hyundai brand rose 8.2% y/y to 66,101 units, setting another company record for the month, with the Elantra, up 37%, and Santa Fe, up 75%, continuing to be top performers. Deliveries at Kia picked up 4%, to 52,025 units, with the Optima holding its place as the brand's best seller for the 21st month.

Outlook and implications

Helped by a sales cut-off that reached two days into September (including Labor Day), August light vehicle demand hit pre-recession levels. The seasonally adjusted selling rate (SAAR) of 16.05 million units was the highest August SAAR level since 2005, notably up from the 14.4 million SAAR a year ago; August also benefitted from one extra selling day and an unusual five-weekend calendar. It was also the highest overall sales volume for any month since May 2007. The mixture of historically old vehicle fleet (average age is 11.4 years) – enabled by new-vehicle durability and postponement of purchase during the economic downturn – and the welcoming credit conditions should assist in preventing a serious pull-ahead effect as a result of the strong August sales pace. Further supporting a strong finish to 2013, manufacturers continue to announce robust upcoming production schedules that will help vehicle supply, especially in anticipation of the new Toyota Corolla, Mazda3 and continued ramp-up of the GM family of full-size pick-ups.

The summer demand strength, up 9.6% y/y, was again distributed across the industry. All manufacturers posted y/y sales growth. Much of the August charge was led by the Japanese automakers, with Honda, Toyota and Nissan delivering the top three y/y increases – each more than 22%. The Detroit automakers realised positive August growth with GM up 14.7% while Ford and Fiat-Chrysler rose 12.0% and 11.5%, respectively. This growth, however, was below trend growth figures, resulting in collective market share for the Detroit Three falling to 44.0%, down in year-ago comparisons for the third consecutive month. Subaru and Mazda continued surges, while moderate growth at Hyundai-Kia and VW Group led to a collective return of 1.3 percentage points of market share during the month. Although automakers were happy to report August sales, expect y/y unit-volume sales comparisons in September to be below these results.

Even with the surge of passenger-car friendly sales from Japanese automakers, the light-truck sector continued to motivate overall demand. In August, light truck sales improved 18.1% y/y and accounted for 51.0% of total vehicle sales. Full-size pick-up sales continued to outperform the overall market with demand up 18.7% in the month, although light-truck sales were complemented by an uptick in crossover utility demand.

Days supply levels remained relatively healthy, but this August sales surge could create some tight inventory conditions on select models leading into September. At Ford, month-end inventory was up 24,000 units compared to last month, translating to a 65-day supply, down slightly from a 69-day supply at the end of July. Month-end inventory at GM of 628,644 units is down 10,000 units from July, as they continue to manage their full-size pick-up inventory. At month-end Chrysler inventory stood at 365,000 units, down a slight 7,000 from the end of last month, a 62-day supply.