Hyundai and Kia capped a year of U.S. market share gains with double-digit sales gains in December as the auto industry’s lean stockpiles continued to rebound, overcoming rising interest rates and new-vehicle prices, and the growing prospects of an economic slowdown.
Volume rose 40 percent last month to a December record of 72,058 at Hyundai Motor America, driven by a 27 percent rise in retail deliveries. Hyundai said it was its fifth straight month of record retail sales, with utility vehicles accounting for 74 percent of retail volume.
While it finished the year with five consecutive monthly sales gains, Hyundai’s 2022 U.S. sales tallied 724,265, a 2 percent decrease compared with 2021. The company said it ended December 2022 with 37,379 cars and light trucks in U.S. inventory, down slightly from 39,898 in November but up from 21,420 at the close of 2021.
At Kia, sales rose 25 percent to a December record of 60,422, its fifth straight monthly advance. The company posted U.S. sales of 693,549 in 2022, down 1.1 percent from 701,416 in 2021.
Genesis Motor America also reported record December sales — 6,172, up 23 percent — helping the brand finish the year with volume of 56,410, up 14 percent.
Other automakers will report December or fourth quarter results later Wednesday. Ford Motor Co. and Volvo are scheduled to release December sales on Thursday, followed by Mercedes-Benz and Jaguar Land Rover next week. Analysts say General Motors remains on track to reclaim the title of top-selling automaker in the U.S. after Toyota grabbed the crown in 2021.
U.S. auto sales are forecast to rise slightly in December, helped by moderately higher inventory levels and robust fleet shipments, but capping a year that will see volume drop below 14 million to the lowest level since 2011. TrueCar estimates fleet deliveries will rise 46 percent year over year to 175,317 across the industry in December.
After demand bounced back following the early months of the COVID-19 pandemic, automakers struggled to rebuild inventories throughout 2022 because of a shortage of microchips and other supply-chain bottlenecks.
Higher interest rates and new-vehicle prices are now making it more expensive for consumers to finance a purchase, forcing some to delay buying or consider a used car, even as job growth remains healthy and consumer confidence rebounds.
“There were fewer giant red bows than dealers would have liked in December,” said Charles Chesbrough, senior economist at Cox Automotive. “Given the large improvement in supply levels, it seems likely that rising interest rates are now constraining demand in the retail auto market. With record-high prices and elevated loan rates, the pool of potential new-vehicle buyers is shrinking.”
While analysts expect U.S. sales to increase in 2023, the wide range of forecasts — from 14.1 million to 15 million — underscores the clouds hovering over the industry.
“Auto consumers are plagued by an uncertain economic environment, high vehicle prices, higher interest rates, and low inventory levels,” said Chris Hopson, principal analyst at S&P Global Mobility.
