Auto Industry News Report

The industry is abuzz with news about electrified vehicles, headline after headline, new models, more volume and new sub-brands. The German luxury brands can't talk enough about their EV plans, Toyota is making big commitments, and this week at the Shanghai Auto Show the production version of the new Cadillac Lyriq is finally being unveiled to the public. It’s scheduled to go on sale next year.

Electrified vehicles are the story right now and market growth is underway. Sales of battery-powered vehicles in the U.S. far outpaced overall industry growth in Q1, according to an analysis by Cox Automotive and Kelley Blue Book.

In addition to electrified vehicles, this newsletter issue covers the latest update from Chief Economist Jonathan Smoke, the mid-month Manheim Used Vehicle Value Index, fleet and certified pre-owned sales for March, and updates on Cox Automotive indices measuring auto credit availability and affordability.

With inventory still tight, we assessed new-vehicle inventory levels last week and will publish a used inventory update this week.

Finally, Cox Automotive research looks at consumer perception of the reborn subcompact truck segment, including the 2022 Hyundai Santa Cruz revealed last week.

We hope you find this selection of stories useful. Visit the Cox Automotive Newsroom for the latest content on industry topics.

Q1 SALES OF ELECTRIFIED VEHICLES JUMP UP 81%

Sales growth of both electric and hybrid vehicles outpaced overall market performance in the first quarter, according to an analysis of the U.S. auto market by Cox Automotive and Kelley Blue Book. Electrified vehicles – automobiles featuring large battery packs and electric motors in the propulsion system – accounted for 7.8% of the total U.S. market, up from 4.8% in Q1 2020.

Electrified vehicle sales growth of 81% far outpaced industry growth. Sales of electric vehicles (EVs) – battery only – grew by 44.8% year over year, reaching nearly 100,000 sales in the quarter, a record. Sales of hybrid vehicles outpaced both the market and EVs, doubling to more than 200,000 in the quarter. The overall automobile market increased by 11.4% in Q1.

Find out more, including which automakers saw the most growth in electrified vehicles.

10 TAKEAWAYS FROM U.S. AUTO SALES: Q1 2021

The Kelley Blue Book data team counted 3,908,738 automobiles sold in the first quarter of 2021, a healthy increase from the same period a year ago and helped by building momentum in March. Sales to fleet buyers were off notably last quarter – down 28% percent from Q1 2020 – but robust retail sales more than covered fleet’s shortfall and provided reason to believe new-vehicle sales have recovered from the pandemic meltdown.

Read the 10 takeaways from the first quarter of 2021. Kelley Blue Book’s final tally of U.S. vehicle sales in Q1 is provided in the traditional quarterly sales report. The team also created a quarterly report focused on sales of electrified vehicles in the U.S.

AUTO SALES LOST MOMENTUM LAST WEEK BUT REMAIN STRONG

As reported in the 7-minute Auto Market Report video from Chief Economist Jonathan Smoke published today, new and used retail vehicle sales lost momentum last week but remain strong, according to an analysis of Dealertrack data. Looking at the major DMAs, most markets are seeing sales performance that is similar to the same time period in 2019. Watch the video to learn the latest on consumer sentiment, business recovery, inventory, prices and other leading indicators.

AUTO INDUSTRY SETS RECORDS IN CPO SALES, WHOLESALE PRICES

CPO SALES: The certified pre-owned (CPO) market had a record-breaking month in March by setting a historic high. For March, 286,061 CPO units were sold, beating the last record high set in March 2019 of 265,878 units. Sales of CPO vehicles increased 80% year over year in March and ended up 36% month over month compared to February. See the Data Point for details.

WHOLESALE PRICES: Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 6.81% in the first 15 days of April compared to the month of March. This brought the mid-month Manheim Used Vehicle Value Index to 191.4, a 52.2% increase from April 2020. Watch the replay Q1 Manheim Used Vehicle Value Index webcast, and see the mid-month Data Point published this morning for the latest details.

AUTO CREDIT AVAILABILITY, AFFORDABILITY IMPROVES AGAIN IN MARCH, ACCORDING TO COX AUTOMOTIVE INDICES

Two monthly measures of U.S. auto retail health – credit availability and affordability – continued to favor consumers in March. Better than normal loan performance and strong vehicle values have helped auto credit access improve in 6 of the last 7 months. Our Dealertrack Auto Credit Availability Index measured loosening of credit in September, October, November, December, and again in February and March after tightening in January.

Average new-vehicle prices dropped 2.3% in Q1 contributing to improved vehicle affordability. The estimated average transaction price for a light vehicle in the U.S. fell $608 to $40,472 in March, according to valuation analysts at Kelley Blue Book. Read the release to learn more.

For the fifth straight month, affordability improved in March, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. With both the price and the average financing rate declining, the monthly auto payment was lower. The number of median weeks of income needed to purchase a new vehicle declined to 31.8 weeks from an upwardly revised 32 weeks in February. The index shows that new vehicles have become relatively more affordable since October 2020.

NEW-VEHICLE INVENTORY EVAPORATING ON STRONG SALES

Robust March sales rapidly drew down new-vehicle inventory to some of the lowest recent levels just as the spring selling season got rolling, according to a Cox Automotive analysis of vAuto Available Inventory data.

The total U.S. supply of available unsold new vehicles stood at 2.66 million as March drew to a close, down from 2.82 million as February ended. Supply has been trending lower since mid-December and is running 25% behind last year and 31% below 2019. Read the latest Data Point for more details, and check back on the Newsroom later this week for an analysis of used inventory levels.

A SEGMENT IS (RE)BORN

With Hyundai revealing the much-anticipated Santa Cruz compact pickup last week and rumors of a small Ford Maverick all but confirmed, the obvious question is: Can the rebirth of the compact pickup truck take the industry by storm?

Recently, Cox Automotive conducted a snapshot study to explore the appeal and awareness of compact pickup trucks and to gauge perceptions of the segment and appeal of specific models, including two expected to launch this year in the U.S. – the Ford Maverick and Hyundai Santa Cruz – along with the Ram 700 available now in Latin America and the Volkswagen Tarok concept. Check out the study findings to learn more about what consumer are expected to consider in a compact truck.

Looking ahead: Check back on the Newsroom for an update on used-vehicle inventory. We are also entering earnings season for automakers and will provide analyses as data become available starting with Tesla on Monday, April 26. We will publish of April sales forecast on Wednesday, April 28, as well as commentary from Jonathan Smoke on the Fed meeting. And, stay tuned for an update on incentives.

As always, if you have questions or want to connect with the Cox Automotive PR team, feel free to contact us.

AUTO QUOTES

“Electrified vehicle growth in the U.S. and around the world is shining a spotlight on battery development and sourcing. As the industry builds more vehicles with battery packs, sourcing of these parts and lifetime management of the battery cells is a critical hurdle the industry must clear.”

– Michelle Krebs, executive analyst, Cox Automotive