July car sales bounce back after Q2 headwinds

July was a mixed bag for car sales, with some of the strongest brands reporting steep sales declines after taking profitability hits in the second quarter.

Big picture: Not all automakers were in bad shape at the end of July. Some saw modest year-over-year improvements allowing industry-wide sales to improve roughly 0.5% (for brands that report on a monthly basis).

• Ford sales were stable in July, falling behind last year’s total by only 0.8%. However, with 164,585 units sold, the automaker still appears to be the month’s best-selling brand.

• Honda had a strong month, selling 120,737 units for an increase of 8%. Its trucks have been especially popular this year, rising 16% in July alone.

• Toyota sales slumped 8.3% in July to a total of 153,040 units, marking a sudden change of pace. Despite the setback, its year-to-date sales remain ahead of last year’s by about 11%.

• Together, Genesis, Hyundai and Kia sold 138,976 units, which is down 3.3% year-over-year. But breaking sales apart shows us that Hyundai had a much better month, with sales up 4%, while it was Genesis and Kia which lost 2.1% and 10.4%, respectively.

Zooming in: July wasn’t exactly a stellar month, but there were a few positive trends.

• For instance, hybrid and electric vehicle demand continued to rise, with brands like Toyota and Hyundai posting best-ever monthly sales totals for the Tundra and Tucson HEVs.

• Incentives are also making a rapid comeback as automakers look to address affordability challenges. J.D. Power and GlobalData estimate incentive spend is up 52% year-over-year, averaging about $2,892 in July.

Bottom line: Ultimately, July’s auto sales were in line with the industry’s expectations after a stable second quarter. While the car market grew slightly in the first half of 2024, analysts now expect the coming months to have more normalized demand.

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