According to analysts at Bank of America Merrill Lynch, the U.S. auto retail industry will sell over 17 million vehicles in 2015 and sales could reach 20 million in 2018. In 2014, U.S. sales grew 6% to 16.5 million vehicles, the fifth straight year U.S. deliveries grew after hitting a 27-year low of 10.4 million in 2009 during the Great Recession. The bold predictions are based on several factors, but the primary reason is that the number of vehicles on the road that are 11 years old and older has increased by almost 28% over the last eight years. Many of these vehicles will need to be replaced in the next few years. Improvements in technology and fuel economy are making older vehicles more and more obsolete.Replacement demand has been driving the industry’s recovery for several years, but improving consumer confidence and an increase in the number of miles driven are creating more discretionary demand for vehicles.
December 2014 Sales Set to Reach 10-Year High
WardsAuto forecasted that 1.51 million vehicles were sold in December, which would be the second-highest December sales tally since at least 1980, just behind December 2004’s 1.53 million. The forecast puts the seasonally adjusted annual rate of sales at 16.95 million-units, within a hair of breaking the 17 million mark for two consecutive months for the first time since June and July 2005.