US auto sales hit record high at 17.47 million in 2015

US December and full-year auto sales, reported yesterday, came in at a record high of 17.47 million in 2015, surpassing an old record of 17.35 million set in 2000. According to analysts, sales could go even higher this year with unemployment continuing to decline and more young buyers entering the market.

The sales were driven by low gas prices coupled with the low interest rates.

Nationwide, gas prices at the end of the year came in at an average of $2 per gallon, according to AAA. Also while, the Federal Reserve raised a key interest rate in December, it remained near zero as against 6.2 per cent in 2000.

According to Oliver Strauss, the chief economist at car buying site, the interest rate would have to reach 3 per cent before it would cause car sales to stagnate, AP reported.

With employment numbers improving last year, more buyers, especially the younger generation found they could finally afford a new car.

People who had delayed purchases during the recession also entered the market by enticed by new vehicles such as the Jeep Cherokee and the revamped Ford F-150 pickup. Ford sold 780,354 F-Series trucks last year over one a minute which made it the nation's top-selling vehicle.

December sales recorded especially strong gains, expected to be up about 10 per cent when final figures are reported, although that was somewhat weaker than forecasts for the month.

According to commentators it marked a dramatic rebound for an industry that was on the ropes six years back. In 2009, massive job losses and tight credit saw car sales plunge to to only 10.4 million, with General Motors and Chrysler Group ending up in bankruptcy.

Sales had risen every year since then and in 2015, a major factor in the sales rebound was strong hiring by employers, who added some 2.3 million jobs.

Auto sales are expected to continue the uptrend in 2016; topping 18 million according to most forecasts.