December U.S. Auto Sales to Set a Decade High; 2015 On Track for a Record Year
By Philly Murtha, December 17, 2015
The big news in December is that new-vehicle sales in the United States should be the strongest of any month in a decade, according to a mid-month sales forecast update by J.D. Power and auto forecasting partner LMC Automotive. This also means that the U.S. auto industry is on track to set a new total (retail and fleet) sales record in 2015.
Based on data collected during the first 11 selling days of the month, total U.S. light-vehicle sales are estimated to rise 6%* (on a selling-day-adjusted basis) from a year ago and exceed 1.7 million units vs. 1.5 million units in December 2014. Total annual sales—including retail and fleet—are anticipated to reach 17.5 million units, outperforming the current record of 17.4 million units set in 2000. Retail sales in 2015 are expected to end the year at 14.3 million units—the fourth-highest annual tally in history.
In commenting on this month’s likely record performance, John Humphrey, senior vice president of the global automotive practice at J.D. Power, said, “With continued record transaction prices, consumers are on pace to spend more than $44 billion on new vehicles in December and $437 billion on new vehicles in 2015, both record levels.” In 2014, consumers spent $404 billion on new vehicles, according to Humphrey.
Humphrey also believes that this week’s interest rate hike by the Federal Reserve will have a low impact on the U.S. auto market going forward. Based on a J.D. Power survey this month of 2,301 consumers who expect to be in the market for a new vehicle in the next 12 months, 80% said they would not change their buying intentions even if the Fed were to raise rates by as much as 1%. Another 13% said they would look for a cheaper vehicle, while 7% would consider buying a used vehicle. Humphrey suggested that only a small proportion of shoppers will be concerned about rates considering they are still low, adding, “We still expect consumers to be drawn into showrooms as manufacturers clear out inventory before the New Year.”
Looking ahead, Jeff Schuster, senior vice president of forecasting at LMC Automotive, said, “We now have great confidence that record sales in 2015 will lead to another volume record in 2016—as much as 17.8 million total sales.
*The percentage of change is selling-day adjusted. There are 28 selling days in December 2015 vs. 26 days in December 2014.