US Auto Market Sets New Sales Record

For 2015, 17.47 million new vehicles were sold in the United States. This mark eclipses the previous record of 17.4 million set in 2000. The sales volumes matches a patter started in 2013. AutoBlog's Chris Bruce provides the money quote:

The new record should put the final nail in the coffin of any lingering bad feelings about the Great Recession, and the industry has made an amazing turnaround. According to Automotive News, the dire times of 2009 saw a 30-year sales low of 10.4 million vehicles.

Consistent with signaling theory, the 34 million new vehicles sold over the last two years represent more than a nail; rather, optimism. American consumers feel confident about their long-term economic fortunes as well as market conditions. While cheap gas and easy credit help drive those sales, consumers needed confidence that today's economic good fortunes would exist not only today but for the life of a five, six, or seven-year loan life.

The new sales mark should also lead to decrease in used vehicles prices. In turn, more Americans will buy more vehicles. The increased sales activity should reduce the average length of vehicle ownership from its record of six years.

Based on the six-average ownership figure, 20014's and 2015's sales marks are not surprising because 2009 was a low point. That is, consumers were ready for a new vehicle.

Given that gas prices and interest rates are forecasted to remain at levels similar to as 2015, and 2010's sales mark was consistent with 2009's, the sales forecast for 2016 auto sales should be in the 16-million range.

Millions more vehicles ready for purchase.