A catalytic combination of an improving economy and lower gas prices will result in record results for the auto industry in 2015.
TrueCar, the online car-selling and data service, is predicting that new vehicle sales will exceed 17 million units next year and total sales will be more than 55.7 million units.
“We see a convergence of favorable economic circumstances pushing auto demand up to pre-recession levels, including continued gains in the job market, the best consumer sentiment in eight years and low fuel prices,” said John Krafcik, president of TrueCar.
“This year has been remarkable in terms of growth and revenue coming from big gains in pickup, utility and luxury vehicle sales. We think 2015 will be even better.”
To boil down TrueCar’s expectations for 2015, the firm expects that companies selling cars will sell more than ever and make more money on each sale next year than they did in 2014.
The most eye-popping number may be the prediction of new vehicle sales hitting 17 million units, which would be a 2.6% increase over the expected result for this year. The record for annual sales is 17.4 million, which occurred in 2000.
However, TrueCar isn’t alone in predicting 17 million units for next year. Mike Jackson, CEO of AutoNation, said the same in late October during the company’s third quarter conference call.
“Of course, anything that begins with a 17 has only happened twice before, I recognize that. But I think indeed, the market will break through 17 million,” he said during the call.
However, not everyone is willing to stretch to the “Magic 17” as the National Automobile Dealers Association has officially pegged next year’s number at 16.9 million, but allows for a possibility that it could push through to 17 million if younger buyers come out in force.
Other numbers to know, include:
- Total market sales, including new and used, should rise 3.4% to 55.4 million units over about 54 million in 2014.
- Total revenue of $1.2 trillion based on average transaction prices, which is a 5.5% annual increase.
- New vehicle revenue, based on transaction prices, is projected to reach $553 billion, a 5% increase
- Average transaction prices of new vehicles in 2015 will rise 2.4% to a record $32,589
- Average transaction prices of used vehicles should increase 2.1% to $16,678 next year.
- Used vehicle volume will grow 3.8% to 38.4 million units, up from 37 million in 2014.
In addition, sales across nearly every segment will rise next year and luxury auto sales will lead the charge with a 9.8% segment increase, which should rise to $116.7 billion in 2015 compared with $106.3 billion in 2014.
(U.S. auto industry generates record $1.1 trillion in 2014 sales. For more, Click Here.)
The fascination with utility vehicles isn’t expected to abate any next year either as TrueCar expects that segment to rise 5% to $192.1 billion, and pickups to reach $95.7 billion, up 4.5%.
(Click Here for details about the new Ram ProMaster City van.)
“Ford’s redesigned F-Series pickups, Mazda’s CX-3 crossover as well as the Mercedes GLA luxury crossover should be standout models in their respective segments next year,” Krafcik said.
(To see more about the debut of Nissan’s Taxi of Tomorrow, Click Here.)
“Mass-market cars, pickups, utility vehicles and premium autos – the four `Super Segments’ TrueCar identified previously – will grow next year, though cars will cede market share as more consumers move to utilities and luxury.”