The U.S. auto industry, which has been growing since the government bailout of GM and Chrysler, is poised for an unprecedented sixth straight annual sales increase next year, driven by job gains, readily available credit and lower prices at the pump.
Deliveries of new cars and light trucks in 2015 will probably total 16.7 million, the average estimate of 12 analysts surveyed by Bloomberg News and the most in a decade. Monday, the National Automobile Dealers Association weighed in with an even more bullish forecast, predicting more than 16.9 million light-vehicle sales.
Additional jobs have given Americans confidence to take out loans on cars, and the cheapest gasoline in almost four years means one less thing to worry about when mulling a big-ticket purchase.
“Consumers are comfortable with their financial positions, and they’re not concerned that they’re about to lose their jobs,” said Alec Gutierrez, an industry analyst for Kelley Blue Book. “They’re buying cars not just because their car broke down, but because they might want something new and flashy, which signifies that they aren’t being completely risk-averse.”
Sales rose five years in a row twice since 1927, according to data compiled by researcher Autodata Corp. and trade publication Automotive News. Once was from 1933 to 1937, when the industry was still getting established.
The second time was from 1996 to 2000, when sales peaked at 17.4 million.
Deliveries for 2015 could exceed this year’s by about 400,000 units. Growth rates have been slowing as sales approach the 16.8 million averaged from 2000 to 2007, before the financial crisis stymied demand and led to the bankruptcies of General Motors and Chrysler.
GM and Chrysler were propped up by aid given under President George W. Bush, then were shepherded through expedited bankruptcies by President Barack Obama’s auto team. The U.S. and Canadian governments helped pay for the restructurings.
Sales rose more than 10 percent each year from 2010 to 2012, then growth slowed to 7.6 percent last year. The total may rise 4.5 percent this year to 16.3 million, according to an earlier survey of analysts.
In 2016, sales may slide back to about 16.5 million, said Steven Szakaly, chief economist for the McLean, Virginia-based dealers’ association. Deliveries will wind down as recent buyers pay down leases and loans, he said.
“In our view, 2015 could be the beginning of a plateau in sales,” he said. “We may have another good year, but it’s hard to see us continuing at the rates we’ve seen the last few years.”
More incentives and increased purchases from young drivers would be needed for new-car sales to top 17 million next year, he said. Job gains could have “outsized effects on the Millennial generation,” he said.
Along with employment, cheap gasoline will continue to drive demand for new vehicles such as trucks and sport utility vehicles, Szakaly said.
“Low gasoline prices aid with want-based decisions versus need-based decisions,” said Gutierrez, the KBB analyst who predicted 16.8 million sales next year. “It adds fuel to the fire. Consumers were already considering trucks and SUVs over more compact cars.
“Low gas prices only exacerbate the shift back toward vehicles that are larger and meet the demands of the consumer.”
The lower cost of gasoline improved NADA’s 2015 prediction by as much as 250,000 units, Szakaly said Monday on a conference call. Light trucks could constitute as much as 57 percent of the market due because of more affordable fuel, he said.
Lacey Plache, chief economist for car-shopping website Edmunds.com, said she thinks this will be the last year of growth.
“Certainly we’ve seen a lot of demand growth, and automakers have matched production to what people are willing to buy,” she said. “We’ll start to see demand growth slow, and supply will match accordingly.”