July car sales were mixed, but no “repo crisis” is expected. | Story

Several of the major automakers now only release quarterly sales figures, but among those still disclosing monthly figures, there are positive signs that rising interest rates are not having a significant impact on sales. Pent-up demand from two years of supply chain shortages is likely a big factor. In other cases, having too few cars for sale on dealer lots continues to dampen sales numbers.

On inventory improvement, Ford for the second consecutive month was the only major automaker to produce sales gains. Ford July sales up 37%. With gas prices high, its electric car sales soared 169% last month.

“Ford was the top-selling brand in the United States in July, fueled by strong demand in our lineup,” said Vice Chairman Andrew Frick. “Our overall sales increased 37% in July and EV sales grew three times faster than the EV segment. The F-Series hit the 60,000 truck mark for the first time this year, with our all-new electric F-150 Lightning which had its best sales month to date.

In a positive sign that supply chain headaches are easing, Ford also said last week that it is now taking new orders for Bronco Sport, Edge, Explorer and Ranger. This follows last month’s decision to start taking orders for F-150s and Transit.

But sales were weaker at Toyota, which reported a 21% drop in deliveries for its flagship brand last month and a 23% drop for its Lexus brand. The decline marked 12 consecutive months of declining sales for Toyota in the United States

Other imports also struggled last month. Honda sales fell 46% in July while its sister Acura saw a 59% decline. The company said the figures reflected “strong demand and limited inventory”.

Kia said its sales fell 11% last month. And Hyundai’s sales were down 11%. Both also blamed too few cars on dealer lots.

Despite high inflation weighing on many U.S. households, Cox Automotive chief economist Jonathan Smoke doesn’t see a “repo crisis” coming for the auto industry, as the default rate since the start of the year in 2022 remains “very low” 2.14% . “Due to a very low default rate and a smaller share of defaults turning into foreclosures, the likely foreclosure rate in 2022 is currently, and likely will remain, very low by historical standards,” said Smoke. Importantly, even with higher delinquencies, default rates in 2022 remain well below 2019 levels, he added.

Meanwhile, the Kelley Blue Book Brand Watch Report says high gas prices have led non-luxury vehicle buyers to consider traditional cars at a level not seen since before the pandemic. Purchases of electrified vehicles have also increased. It says Toyota remained the most purchased brand, widening the gap to No. 2 Ford.

Among specific models, Honda Accord, Honda Civic, and Toyota Camry received the top three purchase consideration scores. The Dodge Charger and the Chevrolet Malibu round out the five most purchased cars.

The Kelley Blue Book Brand Watch Report is a consumer perception survey that also incorporates purchasing behavior to determine how a brand or model stacks up against its segment competitors on a dozen key purchase decision factors of a consumer. Factors that have become more important to consumers, unsurprisingly in this era of inflation and high car and gas prices, are affordability, fuel efficiency and driving performance.

In the second quarter of 2020, when gasoline was much cheaper and new vehicles were widely available, fuel efficiency and affordability had lost their importance. Today, affordability is now one of the top three factors to return to 2017 levels and energy efficiency has risen to sixth place, with 58% of buyers ranking energy efficiency as a major factor in the decision to buy. purchase of a vehicle.

Download the quarterly Kelley Blue Book Brand Watch Report HERE.