Demand, Promotions Lift December New Car Sales

SANTA MONICA, Calif. -- The pace of auto sales in December accelerated to a seasonally adjusted annualized rate of 16.9 million new units. The total was lifted by a strong economy, extended holiday promotional campaigns and mild weather conditions in most of the United States.

New light vehicle sales (including fleet) should reach 1,490,100 units for the month, up 9.5% over a year ago, according to a forecast from TrueCar Inc. On a daily selling rate basis, with one more selling day this December, deliveries likely are up 5.3%.

"With the strongest demand in a decade, gains in highly profitable segments and modest incentive growth, automakers should be grinning as they close the books this year," said John Krafcik, president of TrueCar.

Among larger volume brands, Fiat Chrysler Automobiles and Kia should report volume increases of more than 20% each. Additionally, Subaru should hit a U.S. sales milestone this month, crossing the 500,000-unit mark on annual basis for the first time. General Motors is expected to sell 258,500 units, up 12.3% from December 2013.

In December, incentive spending by automakers averaged $2,894 per vehicle, up 5.7% over a year ago, but flat versus November 2014. "The economy has moved into growth mode and the auto market is hot," said Eric Lyman, vice president of industry insights at TrueCar. "Third quarter Gross Domestic Profit grew 5% and the job market is steady, which is great news for both automakers and consumers. This puts the auto industry in a favorable position as we project 2015 will trump this year's 16.5 million new vehicle sales with a total of 17 million units -- the most since 2005."

Also, the expected registration mix is 86.5% retail sales and 13.5% fleet versus 85.7% retail and 14.3% fleet last December. Total used auto sales, including franchise and independent dealerships and private party transactions, are estimated to exceed 4,456,219, up 18.9% over December 2013, the report found.

Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.