U.S. Vehicle Sales (December 2024)

Strong December U.S. Vehicle Sales Cap Best Year Since 2019

• U.S. vehicle sales rose 0.9% month-on-month (m/m) to 16.8 million (annualized) units in December – above consensus expectations for 16.5 million units.
• Unadjusted sales volumes were 1.49 million units or 2.0% above year-ago levels. The average daily selling rate (DSR) was 59,543 – calculated over 25 days – 6.1% above December 2023's 56,110 daily rate calculated over 26 days.
• Passenger vehicle sales fell 9.3% year-on-year (y/y) while sales of light-trucks increased by 4.6% y/y. Light-trucks accounted for 84% of last month's sales, higher than its year-ago 82% share.   

Key Implications

• Light vehicle sales surprised to the upside for a third consecutive month in December, bringing total sales in 2024 to 15.9 million units (+2.2% relative to 2023). Holiday incentives and a continued gradual descent in financing rates helped to support sales in December. Electric vehicle sales also likely benefitted from buyers looking to take advantage of federal subsides prior to their expected elimination under the incoming administration.
• We expect vehicle sales to rise further in 2025, but the magnitude of improvement will depend in part on policies implemented by the incoming administration. The potential for tariffs to disrupt North American automotive supply chains (and raise prices) represents a material risk to the outlook. Moreover, falling financing costs were a central factor supporting sales growth in the second half of 2024, but expansionary fiscal policy could prop up inflation, leaving rates higher for longer and likely weighing on vehicle sales growth. On aggregate, we remain optimistic for vehicle sales in 2025, but cautiously so, until further clarity is provided on policy priorities for this year.       

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