Improving inventory and higher retail demand helped U.S. sales at Hyundai and Kia advance for the seventh straight month in February.
Deliveries last month rose 9 percent to 57,044, a February record, Hyundai said, with retail sales rising 1 percent to 52,932 and fleet accounting for seven percent of overall volume.
Hyundai said Wednesday it ended February with 54,156 vehicles in U.S. inventory, up 20 percent from 45,158 at the close of January and 190 percent from 18,621 a year earlier.
Volume rose 24 percent to a February record of 60,859 at Kia, with major gains for the Forte, Sportage, Sorento, Telluride and Carnival.
Eric Watson, vice president of sales operations at Kia America, said rising production and inventory levels are allowing the automaker to “fully capitalize” on demand.
Genesis said it also set a February record with U.S. sales rising 21 percent to 4,208 on sharply higher crossover deliveries and the new GV60 electric crossover.
U.S. light-vehicle sales are projected to rise 3.9 percent to 7.2 percent in February, based on forecasts from J.D. Power-LMC Automotive, Cox Automotive, TrueCar and S&P Global Mobility, with sharply higher fleet deliveries offsetting flat retail volume.
Fleet shipments across the industry are expected to come in at 209,200 in February, up 54 percent from February 2022, J.D. Power estimates, and represent 19 percent of total light-vehicle volume, up from just 13 percent a year earlier. Several automakers face a backlog of commercial, government and rental fleet orders as a result of the microchip shortage that prompted many to prioritize more profitable retail volume.
Toyota Motor Corp., Honda Motor Co., Subaru and Mazda will report February results later Wednesday, followed by sales from Ford Motor Co. and Volvo on Thursday. The rest of the industry reports U.S. sales on a quarterly basis.
While pent-up demand remains strong in the wake of chronic inventory shortages, higher interest rates, rising new-vehicle prices and falling used-vehicle prices are weighing on retail volume, analysts say.
“We have diverging markets today,” said Charlie Chesbrough, senior economist at Cox Automotive. “New inventory is slowly stabilizing while used supply is falling. With many affordability-seeking vehicle buyers leaving the new market for the used, dealers may find they have too little used inventory, and price declines may reverse. And [automakers] may find they have too much new-vehicle inventory and be forced to be more aggressive with incentives to boost sales.”