Auto sales are on their way to another 17 million finish as 2019 draws to a close, and the auto industry is racing toward breaking the record for auto sales sold in December, according to a report by Cox Automotive, but sales for the year are down compared to last year.
Continue Reading Below
Sales volumes for December will be enough to elevate the industry above 17 million units for the fifth year in a row. The automotive marketing and software company estimated that December auto sales in the U.S. will reach 1.58 million, just above the 1.55 million in sales necessary to break the record.
The seasonally adjusted sales pace is expected to finish around 17.2 million automobiles, which is slightly higher than last month’s 17.1 million, according to Cox’s report.
Sales volumes are based on 25 selling days, but this December has one less selling day than last month and last December. So auto sales volume is expected to close the year at 3.2 percent lower than the same time last year, but up 11 percent from last month, Cox reports. Daily sales in 2019 averaged about 55,000 automobiles a day. So one less selling day can affect annual and monthly figures, according to Cox’s report.
Meanwhile, total auto sales for 2019 are estimated to decrease more than 1 percent when compared to last year, with this downward trend expected to continue into 2020.
End of year auto sales are considered the most important within the auto industry, as car dealerships look to empty out last year’s inventory and consumer spending and interest is at an all-time high during the holiday season.
Often times, auto sales numbers for December are disproportionately high due to various end-of-the-year dealership deals, discounts and incentives, with December being the top-selling month for auto sales over the last four years and the seasonally adjusted annual rates for those four years averaging more than 17.4 million, according to Cox’s report.
However, one economist at Cox believes this month could be different than the last several Decembers.
"One key factor for this December's results is the sales calendar,” said Charlie Chesbrough, senior economist at Cox Automotive. “With 25 selling days, one less than last December, a sales volume decline is expected. In addition, Thanksgiving and Black Friday deals were late last month, shortening the holiday shopping period and possibly pulling some December vehicle buyers forward. In fact, last month's sales volume was the highest November in history, and 30,000-50,000 above recent years."
The current December auto sales record happened back in 2016, when 1.68 million cars were sold. Since then, the average throughout the last four Decembers has hovered around 1.63 million, Cox Automotive reports.
2016’s December record could possibly be surpassed and broken this month considering the possible influx of sales caused by what Cox describes as deep retail discounts and fleet activity. However, Cox did note that due to fewer selling days this December, the potential of breaking 2016’s record is extremely unlikely.