December expected to be second-best sales month of year

(December 27, 2018) SANTA MONICA, Calif. — Edmunds forecasts that 1,607,724 new cars and trucks will be sold in the U.S. in December for an estimated seasonally adjusted annual rate (SAAR) of 17.4 million. This reflects a 16 percent increase in sales from November 2018 and a 0.3 percent increase from December 2017.

Edmunds experts note that December is expected to be the second-best auto sales month of the year, pushing full-year auto sales for 2018 to 17.3 million, exceeding 2017's 17.2 million vehicles.

"We've been saying all year that 2018 would be a down note for the auto industry, but it ended up defying the odds," said Jeremy Acevedo, Edmunds' manager of industry analysis. "Automakers are really pulling out all the stops in December to close the year on a high note, and car shoppers seem to be in a buying mood."

While 2018 is on track to go down as another solid year for the industry, Edmunds analysts caution that elevated fleet deliveries and unsustainable levels of incentives helped augment sales totals. Edmunds estimates that retail SAAR will come in at 14.6 million vehicles in December, with fleet transactions accounting for 16.1 percent of total sales. An estimated 2.7 million used vehicles will be sold in December 2018, for a SAAR of 39.7 million (compared to 3.0 million — or a SAAR of 39.8 million — in November).

"Even though 2018 is ending stronger than expected, there are a lot of reasons to approach 2019 with caution," Acevedo said.

"Automakers continue to rely heavily on upping fleet sales to mask eroding retail demand, and that's not a sustainable place to be. A record number of lessees returning to the market should help give dealers a boost in the New Year, but rising interest rates and vehicle costs are going to continue to give car shoppers pause and create uncertainty in the market."