December new-car sales close record-breaking year, up 13 percent

(December 23, 2015) IRVINE, Calif. — New-vehicle sales are expected to increase 13 percent year-over-year to a total of 1.7 million units in December, resulting in an estimated 18 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book kbb.com. 

December will cap the biggest year of U.S. new-car sales that the industry has ever seen, with total light vehicle sales of roughly 17.5 million, representing a 6.1 percent jump from 2014 totals. The previous high was 17.35 million units in 2000.

"December has become one of the biggest sales months of the year, helped by year-end targets and prominent holiday sales events," said Tim Fleming, analyst for Kelley Blue Book. "As we move into the new year, expect this strength to continue, although at a slower rate than this year. In 2016, Kelley Blue Book forecasts sales in the range of 17.5 million to 18 million units, which would represent another record-breaking year."

There are several factors that could disrupt the new-car sales momentum, including rising interest rates, an increasing supply of off-lease units that could weaken used-car prices, and increasing manufacturer incentive spending that Kelley Blue Book has seen in recent months, which could be representative of a slowdown in natural consumer demand.

Key highlights for estimated December sales forecast:

    • In December 2015, new light-vehicle sales, including fleet, are expected to hit 1,700,000 units, up 13.1 percent from December 2014 and up 29.3 percent from November 2015.

    • The seasonally adjusted annual rate (SAAR) for December is estimated to be 18 million, up from 16.8 million in December 2014 and down from 18.1 million in November 2015.

    • Retail sales are expected to account for 84.3 percent of volume in December 2015, up from 83.4 percent in December 2014.

As was the case for much of 2015, Fiat Chrysler is projected to do well in December, and the Jeep brand in particular, with expected growth of more than 15 percent.

"Fiat Chrysler has become increasingly dependent on Jeep to drive sales growth, and December should be the best month on record for the Jeep brand," said Fleming. "However, combined sales year-to-date of other Fiat Chrysler brands are slightly down in volume."

Hyundai and Kia are anticipated to have one of the largest percentage increases at 18 percent.  However, sales this year have been propped up by an increase in fleet units. With a sales mix that heavily favors cars, Hyundai and Kia face challenges in a market that has shifted more toward SUVs and crossovers.