Hyundai, Kia sales jump in U.S. amidst global decline

Hyundai and Kia posted their best-ever August sales numbers for the U.S. but faced steep declines worldwide, reflecting intense differences in the global car markets.

Driving the news: Hyundai and Kia both saw sales gains in North America, driven by rising demand for hybrids and Labor Day deals. August represents a turning point for both brands in the U.S. after the CDK Global shutdown impacted sales in June and July.

• Hyundai sold 79,278 vehicles last month, up 22% year-over-year. Hybrid sales rose a staggering 81%, driven by strong demand for the Tucson and Sante Fe crossovers.

• Kia sold 75,217 units, up 4.3% year-over-year. The brand’s hybrid lineup also performed extremely well, jumping 43% compared to last August.

Zooming in: But while the American divisions of Hyundai and Kia are celebrating their successes, it’s a different story at the group’s South Korean headquarters.

• On a worldwide scale, both brands saw sales decline notably from last year. Hyundai posted global sales of 332,963 units, down 5.3%, while Kia reported 251,638 units, down 1.7%.

• While Hyundai saw sales improve within Korea (up 4.6%), its performance in external markets (down 7.2%) deteriorated faster than its overall average.

Behind the scenes: Most car brands are expected to post strong numbers for the U.S. car market in the coming days, possibly making August the busiest month of the year for the industry. But on a global scale, automakers are grappling with competition from China’s electric vehicle sector.

• Chinese car manufacturers are expected to account for 33% of the world’s auto sales by the end of the decade, according to data from AlixPartners.

• Volkswagen is already announcing plans to cut back on spending in response to this shift, going so far as threatening to shut down plants in its home country. It’s possible other brands will soon follow.

Bottom line: As Chinese brands continue to eat away at their global market share, automakers are likely to shift focus to the U.S., where, so far, demand has been resilient. It remains to be seen how safeguarded the American car industry will be from the vulnerabilities plaguing overseas companies.

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