US auto sales: Hyundai has poor month in June 2012, good year

by SR on July 4, 2012

US auto market SAAR (million units)

June 2012 light vehicle sales figures brought further confirmation of the strength of the US market, which was welcome after the whispering over the past month about a weaker-than-expected June. The seasonally adjusted annualised rate (SAAR) of sales came in at 14.1 million, somewhat above expectations of a number in the high 13-million range. The chart above shows that this was the first time the SAAR has exceeded the level recorded in the first half of 2008, before the global financial crisis really bit. In June you can see the red line (2012 monthly SAAR) clearly moves above the green line of 2008. So, this was all good stuff.

For Hyundai Motor the picture was somewhat mixed. As the chart below shows, Hyundai typically posts a solid month-on-month gain in sales in June relative to May, but this year June sales fell quite sharply relative to May. As you can see, that’s about as bad a peformance as the very weak 2003.

US auto market SAAR of sales (thousand units)

It’s hard to say what caused this relative slackness for Hyundai in June 2012. Perhaps the rise in supply of competitive vehicles from Japanese rivals hurt sales, or perhaps competitors are using incentives more aggressively in the short term. Maybe Hyundai’s own capacity constraints caused some strange shortages that cramped sales of popular models. Either way, Hyundai management is unlikely to be perturbed, given that June 2012 sales did rise year-on-year by 7.8%.

Moreover, if you tot up Hyundai’s sales for the January to June period of 2012 and compare them to the same period of previous years, it becomes obvious that Hyundai is still doing well – see the graphic below. I am one of those people who believe that although Hyundai Motor is a worthy competitor to the Japanese, its performance over the past couple of years has been flattered by the weakness of the Korean won and the disruption to the Japanese caused by natural disasters in 2011 (earthquake, flood). That’s as may be, but so far in 2012 Hyundai is posting solid figures, up 10.5% year-on-year compared to the same period in 2011 (the blue line). And because it’s a relatively new and small player in the US market, it is well ahead of 2008 (the green line) as well.

Hyundai auto sales in the US, cumulative year-to-date

Toyota is doing even better, with sales from January to June 2012 rising 28.7% YoY, some way ahead of both Honda (+15.4% YoY year-to-date) and Nissan (+14.4% YoY YTD). Of course, this mostly reflects Toyota’s relative weakness during the same period of 2011, when Toyota’s supply chain was massively disrupted by the impact of the Northern Japan earthquake and tsunami. See how far ahead of the blue line (2011) Toyota’s US sales in 2012 are tracking as a result, in the chart below.

Toyota auto sales in the US, cumulative year-to-date

Still, growth is growth, and market share gains are useful – see the chart below. Last month GM raised its share a little while Toyota’s fell slightly but the trend for Toyota still appears to be positive. It’s interesting that Hyundai’s market share in June 2012 is more or less where it was in 2009 i.e. just around the 5% level. I note that according to public data from Wards, the Toyota Camry is the top-selling car in the US with 213,903 units sold to date in 2012. Meanwhile the Sonata is ninth position at 117,412. A credible performance perhaps for a newcomer, but a long way behind the Japanese. (The order of the top 5 models was Toyota Camry, Honda Civic, Nissan Altima, Honda Accord and Toyota Corolla/Matrix.)

US auto market, share by OEM (%)

It may be that GM is using incentives and other marketing measures to ‘juice’ its market share a little. Year-to-date sales are up only 4.3% year-on-year (see graphic below), by far the weakest performance of the majors. We no longer think of GM as a company on the verge of going bust, but it’s not shooting the lights out either. Both Ford and Chrysler are making a better fist of it this year,

GM auto sales in the US, cumulative year-to-date

Given Toyota’s momentum I am still happy to be recommending Toyota and its parts suppliers (Denso, for example, or Aisin Seiki or even Toyota Boshoku) in preference to industrial stocks or other OEMs. Nevertheless, I suppose that the most impressive performer for me year-to-date in the US has been Nissan. It does not have the advantage of a low base, like Honda and Toyota, nor is it a newcomer like Hyundai or KIA, growing from a small base. Yet here it is, tracking steadily above not only 2011 but also 2008 sales. Well done Nissan.

Nissan auto sales in the US, cumulative year-to-date

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