Economy, Auto

Record US Auto Sales Expected

Record US Auto Sales Expected
Record US Auto Sales Expected

US auto sales are headed into a strong summer, likely to help produce new-car sales of more than 17 million for all of 2015 potentially making this year the third-best year ever.

Today’s sales environment is, “arguably the strongest and healthiest the auto industry has been in a very long time,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive, Forbes writes.

If auto sales break 17 million this year, it would be the highest total since 2005. The all-time US sales record was 17.4 million in 2000. Specifically for June, J.D. Power and LMC Automotive predicted sales of just under 1.5 million, an increase of about 4% from June 2014. Shopping website had a similar forecast. Kelly Blue Book had a somewhat higher forecast for June of around 1.5 million.

Despite modest year-over-year percent increases in recent months, Schuster said in a written statement auto sales are supported by “a basket of metrics,” including economic indicators, gas prices, stock market prices, higher and stable transaction prices on cars and trucks, plus a long list of new models either launching or in the pipeline.

That is in contrast to the last sales peak. It took massive discounting to boost sales to 17.2 million in 2001. General Motors launched “Keep America Rolling” incentives in response to the Sept. 11 attacks that year, forcing its rivals to follow suit.

US auto sales hit 17 million again in 2005. With the industry entering the fall selling season with giant inventories of unsold cars and trucks, GM introduced “Employee Pricing for Everyone” that year, again forcing competitors to follow GM’s lead.

That pressure is largely off in 2015. Production and inventories are more in line with sales. There are plenty of incentives around, but the automakers are having better success limiting the best deals to certain models, instead of across-the-board discounting.

Based on the strength of May auto sales, analysts for J.D. Power and LMC Automotive recently raised their estimate for all of 2015 to 17.1 million, from 17 million.

In May, US auto sales were about 1.6 million, an increase of only 1.6% from a year ago, according to Autodata.