Automakers’ December surge seen wrapping record U.S. sales year

GM Arlington plant

CHICAGO _ Armed with year-end promotions and five weekends to deploy them, automakers put a strong finish on what will probably be a record sales year in the U.S.

The biggest U.S. and Asian automakers will all report December gains of at least 10 percent on Tuesday, spurring the industry to an annualized selling rate of 18 million when adjusted for seasonal trends — a record for the month — according to analysts’ projections in a Bloomberg survey. That would secure a full-year total of 17.5 million car and light truck sales, breaking the record of 17.4 million set in 2000.

Low gasoline prices, available credit, rising discounts and a strengthening job market spurred far more transactions than had been anticipated when the year began. In a November 2014 survey, analysts projected 16.7 million light-vehicle sales, but only one month’s pace was slower than that. December may be a fourth straight month of an 18 million or better pace; the industry had never posted more than two such months in a row before 2015.

“It’s been one record after another,” said Tim Fleming, an analyst for Kelley Blue Book, a vehicle valuation research firm, which projects as many as 18 million sales next year. “I don’t think we’re at the peak quite yet. Things are definitely pretty good right now for the auto industry.”

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When automakers report monthly sales on Tuesday, Fiat Chrysler Automobiles NV may lead the pack with a 19 percent increase from a year earlier, benefiting from the month’s two extra selling days. Deliveries of the company’s Jeep brand of sport utility vehicles rose 23 percent through November.

U.S. consumers have been snapping up SUVs all year. While gasoline prices as low as $2 a gallon have helped, the biggest gains have been among subcompact models offered by mainstream brands. Five new vehicles in the segment — Chevrolet Trax, Honda HR-V, Mazda CX-3, Fiat 500X and Jeep Renegade — powered an estimated 48 percent increase this year, according to Stephanie Brinley, an analyst with IHS Automotive.

The segment’s growth will probably be eclipsed by compact SUVs in 2016 and especially 2017 when Jeep, Nissan and Volkswagen introduce new models and GM updates the Chevrolet Equinox and GMC Terrain, she said in an e-mailed statement.

Demand for well-equipped new models has provided a boost to the economy that shows no signs of letting up, said Bob Carter, Toyota Motor Corp.’s top U.S. sales executive.

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“We’re convinced we’ve got another two solid years in front of us,” Carter said in a telephone interview. “This business is being fueled by good, solid economic growth. Plus the children of the baby boomers — the biggest single generation this country has ever seen — are entering the car market in force. Over the last 90 days, they’ve been up to 27 percent of our sales. That’s part of why you’re seeing such a rapid movement to SUVs and compact SUVs.”

The results for 2015 would mark a sixth straight year of growing U.S. sales, the longest run since at least World War II. If the total reaches 17.5 million for the year, that will be more than two-thirds better than in 2009, the year the Obama administration led GM and Chrysler through bankruptcy restructurings.

“It’s truly remarkable that the auto industry is finishing off its best year ever just six years after the depths of the Great Recession,” analyst Jessica Caldwell of Edmunds.com said in an e-mailed statement. “Low-APR offers and tumbling gas prices are making it easy for shoppers to buy or lease a new car, but don’t overlook the products themselves. If you’re buying a new car today, you’re getting a safer, more fuel- efficient and more technologically packed vehicle than ever before.”

While incentives have risen this year — 4.8 percent to $2,907 per vehicle through November, according to Autodata Corp. — consumers are choosing models with more entertainment and safety technology that pushes prices higher, too.

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“People who can afford to buy new cars are buying heavily equipped cars,” Jack Nerad of KBB said in an interview on Bloomberg Television. They’re not buying stripped-down vehicles “and they aren’t buying cheap models.”

_ With assistance from Carol Massar and Cory Johnson.