Hyundai gains double-digit EV market share, new car days' supply retreats, auto loan denials surge

Hey, everyone. Car insurance premiums are out of control.

Average insurance prices have already jumped 15% in 2024, hitting $2,329 annually. But that’s not the end of it —

Analysts estimate premiums will keep climbing, reaching $2,469 by 2025.

Bottom line: Car ownership is becoming more of a luxury than a given.

—CDG

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Each week, I curate the top 5 automotive industry headlines based on the topics CDG readers engaged with the most on social media. Let’s get started.

1. Hyundai becomes no. 2 EV brand in July

Hyundai, including its subsidiaries Genesis and Kia, is the second-largest EV seller in the U.S. after hitting double-digit market share last month.

Driving the news: Hyundai has quickly become one of North America’s biggest auto competitors, especially in the EV market.

• Hyundai, Kia, and Genesis accounted for 10% of all U.S. EV sales in the first 7 months of the year.

• This puts the group in second place in terms of market share, beating former runner-up Ford, who comprised 7.4% of sales.

• While Tesla continues to dominate the market its share dipped below 50% for the first time in Q2.

Zooming in: The Kia EV9 is driving most of Hyundai’s growth, thanks in part to the introduction of aggressive incentives. EV9 sales raced past multiple competing models in Q1 and Q2, beating the VW ID.4 and Tesla Model S.

(Read the full article here)

But as Hyundai accelerates its electrification strategy, Ford is slowing down its EV rollout…

2. Ford pulls back on its EV plans...again

Driving the news: Ford is canceling plans for an already delayed three-row SUV EV and postponing the launch of a full-size EV pickup by around 18 months.

• Instead, the automaker will introduce more hybrids and a new, all-electric commercial van in 2026, followed by a mid-sized EV pickup in 2027.

• The change in strategy will cost Ford big time. John Lawler, Ford’s Vice Chair and CFO anticipates a $400 million write-down of its current assets for big electric SUVs which could lead to $1.5 in additional expenses and expenditures down the line. 

Why it matters: Consumers dictate the market and Ford is listening. So far this year, overall EV sales growth has remained stagnant – increasing by around 7%. On the other hand, hybrid vehicle sales skyrocketed 35.3% from January through June. 

(Read the full article here)

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Some good news for Ford — its new vehicle inventory surplus is shrinking along with a few other brands…

3. New car days' supply retreats for dealers at the start of Aug.

New vehicle days’ supply dropped rapidly in July due to fluctuating inventory and sales data, a lingering consequence of June’s CDK Global cyberattack.

What’s happening: The industry carried 2.79 million new vehicles at the start of Aug., a decline of 3.6% from July according to Cox Automotive.

• While inventory levels appeared relatively stable, days’ supply plummeted 43% to 68 days.

• This swift decline was caused by July’s abnormally high days’ supply level. Compared to May, before the DMS outage, days’ supply has dropped by only 10.5%.

Bottom line: With new arrivals hitting dealership lots, consumers are also likely to see deals popping up for older model-year vehicles, driving up sales as we near the end of Q3.

(Read the full article here)

Meanwhile in the used car market…

4. Pre-owned vehicle sales rebound, inventory tightens

By the numbers: Retail used car sales saw a 27.6% increase from June. The recovery in sales has pushed the average used car days’ supply from 53 to 41 days in July. There were 2.17 million unsold used cars as of Aug. 1, down 3% year-over-year and 50,000 units fewer than at the start of July.

• With inventory tightening, the average listing price edged up to $25,415 in July, though it’s still down 5% from July 2023.

• Cox attributes this month-over-month rise to changes in the mix of vehicles sold. 0-to-2-year-old cars captured more sales in July than in months past.

Big picture: July’s strong sales numbers are encouraging, but the market isn’t out of the woods yet. With inventory getting tighter and the lingering effects of June’s disruptions still in play, managing inventory and pricing is not an easy task for dealers.

(Read the full article here)

At the end of the day, regardless of the new or used car market, would-be car buyers are getting denied loans at record levels…

5. Auto loan rejection rates spike this summer

Elevated costs of borrowing on top of high vehicle prices, have caused the auto loan denial rate to surge.

Driving the news: According to the latest data from the New York Fed, 19% of would-be auto loan borrowers were turned down during the 12 months ending in June.

• Rejection rates have jumped 5% year-over-year despite the rate of applications staying flat. 

• One reason behind the spike could be an increase in applications from lower-tier credit borrowers (<680 FICO) which rose 6% against last year. As lenders grapple with inflation and rising defaults, they are less inclined to extend credit to riskier borrowers.

Why it matters: Consumers facing a higher debt burden are finding it more difficult to meet their financial responsibilities, increasing the likelihood of loan applications being rejected.

What’s next: Possible relief is on the horizon. The latest minutes from the Federal Reserve meeting suggest that the central bank is leaning towards an interest rate cut on Sept. 18.

(Read the full article)

That’s a wrap for now – make sure you’re following along on X, LinkedIn and IG for more real-time updates.

Thanks for reading. Hit reply and let me know if you found this week-in-review valuable or have any feedback. I’ll see you next weekend.

—CDG

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