2012 U.S. auto sales expected to be strongest in five years

U.S. auto sales are expected to rise 9 percent in December, making 2012 the best year for the industry since 2007.

New car sales were favoured by easier access to credit, rising home prices and pent-up demand. However, the strong end to the year could be overshadowed by concerns that consumers may cut spending in January due to the “fiscal cliff”. In December, U.S. consumer confidence reached the lowest point in four months on worries over the $600 billion in automatic spending cuts and tax increases that take effect unless Congress acts to stop them.

2012 sales are expected to reach 14.5 million vehicles, more than 13 percent higher than the previous year. This would mark the third straight year that the industry has posted a double-digit sales gain.

For 2013, gains are expected to slow to single-digit growth, with some analysts forecasting modest improvements in U.S. consumer confidence and employment. According to Kelley Blue Book, a tax increase for middle-income households could hold back sales growth through 2013 and beyond.

However, most analysts said the „fiscal cliff” deadline did not affect sales in December. According to analysts polled by Thomson Reuters, December’s annual sales pace will be around 15.2 million vehicles.