In six years, the US auto industry went from a recession to an all-time sales record in 2015! The United States auto industry sold more cars and trucks in 2015 than ever before. A total of 17,470,659 vehicles were sold in 2015, an increase of 5.7% compared to 2014 surpassing the previous record of 17.41 million vehicles set in 2000.
“It’s a great time to be in the automobile business.” — Tom Libby, IHS Automotive Analyst
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What a difference six years can make. The US auto industry set record sales numbers in 2015 as a total of 17,470,659 vehicles were sold, an increase of 5.7% compared to 2014. 2015’s sales numbers surpassed the previous auto sales record of 17.41 million vehicles that was set in 2000. The record breaking sales are due to a variety of factors, and they look to continue into 2016, and even beyond.
The six year growth streak is the auto industry’s first since World War II. The industry remained relatively steady after the previous high in sales in 2000, but dropped dramatically in the later half of 2008 and into 2009 due to a global-scale recession. During the recession, auto sales averaged around 10 million sales per year, but since 2009, U.S. auto sales of new cars and trucks have increased 68%.
The auto industry resurgence can be credited to lower gas prices, attractive incentives, and increased demand that doesn’t appear to be slowing down anytime soon. During the recession, consumers held on to their used cars as a cost-cutting measure. Those cars are now six years older.
In 2015, the average new vehicle was priced at $33,188, an increase of 20% since 2005 ($27,655). Increased customer interest in pickup trucks and small-to-midsize crossovers played a big part.
Increased sales price has also increased revenue for auto companies. An estimated $570 billion was made from auto sales in 2015.
Average new car sales price is expected to continue climbing in future years; 2008 was the only year since 1995 that the average price didn’t rise was 2008.
Although suggested new car retail price is at an all-time high, gross profit per car sale was down $250 in 2015. WHY? Auto industry incentives are to credit for this decline. Average industry incentives per vehicle rose 3.9% from December 2014 to December 2015, averaging $3,063 of savings for customers.
GMC provided one of the most popular incentives of 2015: zero percent financing on 2015 GMC Sierra 1500 for up to 72 months.
The rise in sales price has spawned a rise in leasing. Edmunds projects that leases will account for a record 29% of new United States auto sales for 2015, an increase of 2% from 2014. 10 years ago, leases accounted for 16.6% of auto sales.
Hyundai presented one of the most popular lease options for 2015, allowing customers to lease the 2015 Genesis for $370 a month over 36 months, requiring no down payment.
An interesting trend has emerged for auto consumers. Consumers are more likely to purchase an imported car than a domestic brand. However, trucks are the reverse. Truck buyers are more likely to purchase a domestic truck than an imported one.
Overall, imports beat out domestic vehicles in 2015.
General Motors, Ford, Chrysler, Toyota, and Honda accounted for 69% of new auto sales in 2015. As in 2014, General Motors led the way in 2015, closely followed by the other four major brands.
General Motors held the most market share, increasing sales by nearly 6% over 2014. Ford leapt over Toyota to finish with the second highest market share in 2015. Nissan motors gained the most out of all automakers with a 19% sales increase over 2014.
“It was really the year of the SUV.” — Jessica Caldwell, Director of Industry Analysis for Edmunds.com
Car manufacturers have set their sights on the increased popularity of crossovers and have nearly doubled the number of crossover models in the past decade alone. If the North American International Auto Show is any indication, you can expect to see more crossover SUVs in 2016.
Three pick-up trucks took the top sales spots for 2015, pacing two fuel efficient, midsize cars. The top 5 autos sold in 2015 were:
Ford’s F-Series remained America’s best-selling pickup truck for the 39th consecutive year and the best-selling vehicle for 34 straight years. Toyota Motor Corporation’s midsize Camry was the best-selling car for the 14th consecutive year.
The Ford Mustang has surpassed the Chevrolet Camaro as the best-selling muscle car of 2015.
This is the first time since 2009 that the Mustang outsold the Camaro, and the success can be attributed to increasing numbers of millennial age buyers. Both Ford and General Motors have been targeting younger buyers with updates to their classic cars such as modern interior features and coupling turbo charged engines with fuel efficiency.
Consumers were split on luxury brands for 2015 as BMW paced the luxury field, but only sold approximately 3,000 more luxury units than the third place brand, Mercedes.
Auto sales are up for a multitude of reasons.
While overall sales are up, trust is down for some companies.
Volkswagen, Audi, and Porsche were caught in a scandal involving diesel emissions. Software was placed in the vehicles that detected when they were being tested for emissions, changing the vehicle’s performance to improve results allowing for the vehicles to pass the test when they wouldn’t have otherwise.
Takata airbags featured a dangerous flaw for many customers. During an accident, Takata airbags inflated with so much force that they unleashed shrapnel into the vehicle. The airbags turned into one of the most widespread safety recalls in U.S. auto history, covering 23 million airbag inflators across 19 million vehicles produced through 12 car companies. The airbags are linked to 9 deaths and over 100 injuries. All deaths occurred in Honda vehicles.
The website TrueCar.com provided a promising website for car dealers and buyers. TrueCar provided customers with pricing transparency while providing auto dealerships with a cheap and easy way to close sales. In July, the stock plummeted 40% in one day as the company admitted that they were failing to turn web prospects into sales.
The increase in auto sales is expected to continue into 2016. Total auto sales for 2016 are projected to range around 17.5-18 million as Americans will look to continue purchasing family friendly vehicles like cross-overs and SUVs. “We expect to see a second consecutive year of record industry sales in 2016,” GM Chief Economist Mustafa Mohatarem said in a statement.