With a month left, 2015 almost certainly will be the U.S. auto industry’s best sales year ever as consumer confidence, easy credit, tumbling gas prices and the need to replace old vehicles have created the equivalent of a surfer’s perfect wave.
Analysts are forecasting that sales for all of 2015 will exceed 17 million and possibly break the previous record of 17.4 million set in 2000.
For the third consecutive month the adjusted selling rate exceeded 18 million, coming in at 18.2 million in November.
Fiat Chrysler Automobiles sales rose 3%, Ford’s edged up 0.4% and General Motors reported a 1.5% increase despite two fewer selling days.
Barring an unforeseen economic calamity in coming days, 2015 industry sales almost certainly will exceed the current record of 17.4 million vehicles set in 2000. Here’s the kicker: next year could be even better.
The only bad news fell mostly on Volkswagen where sales of its mainstream VW brand plummeted nearly 25%. This was the first full month when the impact of the German automaker’s cheating on diesel emission tests was reflected in showrooms.
“The fundamentals are just really strong right now,” said Stacy Doyle, senior auto analyst with TrueCar, which provides pricing information to car buyers. Job creation remains strong. Economic growth is modest but steady.
The increasing likelihood of a quarter-point interest hike this month by the Federal Reserve is not dampening consumers’ spirits. The prospect of a rate hike may have helped boost November sales.
“Many consumers may also be sensing the inevitable hike in interest rates and looking to make a purchase before financing costs rise,” said Karl Brauer, analyst with Kelley Blue Book.
Nissan reported a 3.8% sales increase last month, led by its Rogue compact crossover (up 49.8%) and larger Murano crossover (up 45.2%). Toyota’s sales rose 3.4%, helped by its strongest Black Friday weekend in eight years.
Honda sales dropped 5.2%, as sales of its Acura luxury brand tumbled 17.6%. Hyundai posted an 11.8% increase on the strength of its subcompact Accent, compact Elantra and Tucson compact crossover sales.
At FCA, Jeep sales surged 20% from November 2014 as the Grand Cherokee, Compass and Patriot all posted increases of more than 10%. Sales of Chrysler and Dodge fell 12% and 8% respectively. Ram sales edged up 1% while Fiat sales fell 3%.
It was the 68th consecutive month the Auburn Hills automaker reported a sales increase from the year-earlier month.
“Despite having two less selling days this November, FCA US still recorded its best November sales since 2000 and our 68th consecutive month of year-over-year sales increases,” said Reid Bigland, head of U.S. sales.
Ford sales were up slightly as a 10.4% jump in sales of the F-Series pickup offset declining sales of Ford’s passenger cars and SUVs.
“We saw strong customer demand for our cars and SUVs with the latest technology and sold a very rich mix in November,” said Mark LaNeve, Ford vice president, U.S. marketing, sales and service. “F-Series and commercial vans also were very strong, with an 18% gain for the month and our best November sales performance for Ford Trucks in eight years.”
Sales of the Transit and Transit Connect vans nearly doubled from a year-earlier in November.
At GM, increases of 4.8% at Chevrolet and 1.8% at Cadillac more than offset falling sales at Buick (down 16.6%) and GMC (down 1.90%).
“The phenomenal growth of crossovers in a record-setting market is the biggest sales story of 2015,” said Kurt McNeil, GM’s U.S. vice president of sales. “Buick was one of the pioneers of the fast-growing small crossover segment with the Encore. Chevrolet’s crossover sales growth is far outpacing the rest of the industry, thanks to the Trax, Equinox and Traverse.”
At this point, most automakers are at least as focused on the mix of their sales as the total. The popularity of full-size pickup trucks and SUVs contribute to the increasing price consumers are willing to pay.
TrueCar, which provides consumer information about car and truck pricing, reported that the average new vehicle sold for $32,966 in November, up slightly from a year earlier.
Ford officials said the average transaction price of F-Series pickup trucks was $42,800 in November, up $2,700 from a year earlier.
Erich Merkle, Ford U.S. sales analyst, said the average pickup truck on U.S. roads is 11.8 years old. So demand driven by the need to replace aging trucks won’t weaken in the near future.
Americans continue to purchase pickups, SUVs and crossovers in large volumes, a trend that will only gather momentum as gas prices are falling below $2 a gallon in much of the country. The national average today is $2.03 per gallon according to the AAA Daily Fuel Gauge Report, 73 cents lower than Dec. 1, 2014.
In Michigan the average price for a gallon of unleaded regular is $1.79, an astounding 57 cents lower than just one month ago.
Banks, auto finance companies and credit unions are making car loans to nearly anyone who’s interested.
“While we expect a possibly record-setting December and another strong year in 2016, the prospect for interest rates edging higher while personal incomes are not, along with rising incentives, are caution lights we are watching,” said Michelle Krebs, senior analyst for Autotrader.com.