December Projected as Strongest Month in a Decade for U.S. Auto Sales

WESTLAKE VILLAGE, Calif., Dec. 17, 2015 /PRNewswire/ -- New light-vehicle sales in December are expected to be the strongest of any month since 2005, with 2015 on track to set an annual record with 17.5 million sales, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

New-vehicle retail sales in December are projected to reach 1,400,100 units, while total light-vehicle sales are expected to reach 1,712,200, both a 6% increase on a selling-day adjusted basis, compared with December 2014. Both sales volumes are also the highest for any month since July2005, when retail sales hit 1.64 million units and total sales 1.80 million units.

With a strong close, 2015 is expected to set a total light-vehicle sales record of 17.5 million units, topping the previous high of 17.4 million in 2000. Retail sales in 2015 are forecasted to close at 14.3 million units, the fourth-highest retail sales year in history.

Retail Light-Vehicle Sales
Five selling weekends in the month—for the first time since 2012—and the most selling days (28) of any December since 2009 have helped boost new-vehicle sales. The seasonally adjusted annualized rate (SAAR) for retail sales in December 2015 is expected to reach 14.9 million units, up from 13.8 million units a year ago. SAAR is a rate adjustment that attempts to remove the seasonal variations in the data. Most data is affected by the time of the year. Adjusting for the seasonality in data means that more accurate comparisons can be drawn from month to month year-round. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

"As 2015 comes to a close, the industry is expected to post its strongest sales month of the year," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "With continued record transaction prices, consumers are on pace to spend more than $44 billion on new vehicles in December and $437 billion on new vehicles in 2015, both record levels." The previous record of $407 billion in annual consumer expenditure was set in 2014.

"The Federal Reserve's increase in interest rates this week should have a minimal impact on new-vehicle sales," said Humphrey. 

Earlier this month, J.D. Power surveyed 2,301 consumers who expect to be in the market for a new vehicle in the next 12 months, asking them how a Fed rate hike would affect their purchase decision. In a scenario where the Fed raises interest rates by 1% (which is higher than the actual 0.25% to 0.50% rate increase), 80% of consumers in the market for a new vehicle said they would not change their buying intentions; 13% said they would look for a cheaper car; and 7% would consider buying a used car.

"There is the risk of a knee-jerk reaction from consumers to big economic news, leading them to delay buying, but the survey suggests it's a very small proportion of shoppers who are concerned about rates, particularly at this low level. In other words, we're not expecting much of a negative impact," Humphrey said. "We still expect consumers to be drawn into showrooms as manufacturers clear out inventory in preparation for the New Year."

Total Light-Vehicle Sales
The SAAR for total sales in December is projected to reach 18.1 million units, an increase of 1.3 million units from a year ago and the fourth consecutive month with the selling rate above 18 million units.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

¹Figures cited for December 2015 are forecasted based on the first 11 selling days of the month.
²The percentage change is adjusted based on the number of selling days in the month (28 days in December 2015 vs. 26 days in December 2014).

Fleet volume in December 2015 is projected to hit 312,200 units, a 6% increase on a selling-day adjusted basis from December 2014. After a surprisingly strong fleet month in November (19.5% fleet share), fleet sales are expected to account for 18.2% of total sales in December 2015.

Sales Outlook
LMC Automotive's forecast for 2016 is 17.8 million units for total light-vehicle sales 14.6 million units for retail light-vehicle sales. "We now have greater confidence that record sales in 2015 will lead to yet another volume record in 2016," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The year-over-year growth rate is projected to be one-third of the growth experienced in 2015, but total and retail light-vehicle sales are at a 2% increase in 2016, keeping the expansion going."

North American Production
North American production in November 2015 was 1.46 million units, a 6.7% increase, compared with November 2014. Given demand, inventory levels decreased to a 65-day supply from a 69-day supply at the end of October, but down from 71 days at the same point last year. LMC Automotive is maintaining its production forecast for 2015 at 17.6 million units and its 2016 forecast at 18.1 million units.

About J.D. Power
J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. Power Information Network (PIN) from J.D. Power has revolutionized the automotive industry by collecting and analyzing real-time transaction-level data for new and used vehicles. PIN's data and analytics help automakers and dealers manage risk, monitor metric performance and improve business results. Headquartered in Westlake Village, Calif., J.D. Power has offices in North/South America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit www.JDPower.com. J.D. Power is a business unit of McGraw Hill Financial.

About McGraw Hill Financial 
McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include Standard & Poor's Ratings Services, S&P Capital IQ and SNL, S&P Dow Jones Indices, Platts, CRISIL and J.D. Power. The Company has approximately 20,000 employees in 31 countries. Additional information is available at www.mhfi.com.

About LMC Automotive
LMC Automotive is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC's global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has locations in the United States, the UK, France, Germany, China, Japan and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector.  For more information please visit www.lmc-auto.com.

Media Relations Contacts
John Tews; J.D. Power; Troy, Mich.; 248-680-6218; [email protected]
Emmie Littlejohn; LMC Automotive; Troy, Mich.; 248-817-2100; [email protected]

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power or LMC Automotive. www.jdpower.com/corporate  www.lmc-auto.com

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SOURCE J.D. Power

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