• by Karl Greenberg , December 17, 2015

Prognosticators are seeing December auto sales as a reason to make corks fly at dealerships and OEMs. It is shaping up to be the strongest of any month since 2005, according to predictions by early-birds. J.D. Power and its LMC Auto unit see this year being on track to break a record with 17.5 million sales.

Projections from JDP/LMC are that 1,400,100 cars and trucks will be delivered from dealerships to consumers' garages this month. If you throw in sales to fleet customers, the total could be more like 1,712,200. Both retail and total would constitute a 6% increase versus Dec. 2014, per the firm. 

“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, in a statement. “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 firm says the previous record of $407 billion in annual consumer expenditure was set in 2014.

The big news for prospective automotive volume is the Federal interest rate hike. J.D. Power surveyed 2,301 in-market consumers this month — people who are looking to buy a new vehicle in the next 12 months — on how a Fed rate hike would affect their purchase decision. When given the prospect of a 1% increase, 80% of respondents 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.”