The US auto industry is on the verge of doing something it's never done before
The industry was on a tear in 2015, running at or above a torrid 18-million sales pace for much of the year.
If the full-year total comes in at 17.5 million, then it will be the best year ever for the US market, topping a sales record in 2000, when 17.4 million vehicles rolled off dealer lots.
We won't know if the 2000 record will be broken until all the automakers report their numbers, but its an important target for the US industry, which saw sales plunge below 10 million in the depths of Great Recession.
Strong December sales and a record 2015 will prove that the car business has fully recovered from the worst chapter in its history.
Analysts surveyed by Bloomberg, both at consumer auto information resources such as Kelley Blue Book, True Car, and Edmunds and at big investment banks like Goldman Sachs and JP Morgan, are pegging the December sales pace in the high 17-million to low 18-million range.
It'll be close, though, and the overall record might require some blockbuster results from smaller companies.
The biggest carmakers to report so far are falling short of growth estimates. At Ford, for example, U.S. sales rose 8% in December to 239,242 vehicles, bringing its full year total to 2.6 million (its highest since 2006). Analysts expected an increase of 11%. GM's sales growth in December was also lighter than expected.
Ford and GM are down about 3% as of midday in New York. The broader market is mostly unchanged.
A critical factor will be sales of trucks and SUVs, which have delivered off-the-charts sales and profits to carmakers all year.
Several key factors are driving the rebound: an improved economy, with "full employment" achieved after the unemployment rate hit double digits following the financial crisis; cheap gas; and easy access to credit. Adding to this is the willingness of the automakers' finance arms and banks t0 extend auto-loan terms beyond the usual five-year thresholds.
At various points in 2015, alarm bells were raised about the underpinnings of this boom. Subprime auto loans, for example, have worried market observers. However, default rates remain low. And the consensus among various members of the industry that I've spoken with this year is that sales at current levels should continue through 2016.
The average age of a car on US roads, after all, is at an all-time high: 11 years. Pent-up demand could actually take another two or three years to be fully worked through.
However, auto sales in the US have been steadily ascending since 2009, and everyone in the industry knows that the business is cyclical. Although a 20-million US market isn't out of the question, at some point sales will decline. The tightrope the auto industry demands that car makers capitalize on the boom while they can but avoid the errors of the past.
They need to avoid putting too much money on the table in incentive spending, in an effort to capture market share. And they need to invest in research and development now to avoid losing consumers' attention later with lackluster models. Detroit must be careful about an over-reliance on big SUVs and full-size pickups.
We'll keep an eye on sales throughout the day and update you if 2015 breaks the record.