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TheStreet Open House

Car Sales to Jump in December, Highlighting Bright Spot in Economy

DETROIT ( TheStreet) -- U.S. vehicle sales are expected to show a double-digit gain in December, capping the fourth consecutive year of increases.

Experts are predicting light-vehicle sales will climb 10% to 14% this month. For the full year, sales should rise about 13.5%.

"December will be the icing on the cake for 2012 -- it's a strong close for a year that had significant auto sales growth throughout," Edmunds.com analyst Jessica Caldwell said in a statement. "Along with the momentum of the improving economy, December car sales have been helped by compelling advertising, generous deals from most automakers, and the rush of demand that was unexpectedly and unfortunately caused by Hurricane Sandy."

For the full year, Edmunds projects sales of 14.5 million, which would represent a 13.5% increase over 2011 and the highest annual sales total since 2007. That is "more than a million better than most market forecasts at this time a year ago," Jefferies & Co. analyst Peter Nesvold wrote in a note.

U.S. light-vehicle sales totaled 12.8 million in 2011; 11.6 million in 2010; 10.3 million, the lowest in 27 years, in 2009; 13.2 million in 2008; and 16.1 million in 2007. From 1999 through 2007, sales exceeded 16 million.

The auto industry expects the positive trend to continue into 2013. LMC Automotive is forecasting sales of 15 million units next year, or 4% growth. "The U.S. light-vehicle sales market continues to be a bright spot in the tremulous global environment," LMC analyst Jeff Schuster said in a statement. "The only major roadblock ahead for the U.S. market is the fiscal cliff. Assuming that hurdle is cleared, 2013 is one step closer to a stable and sustainable growth rate for autos."

Added TrueCar.com analyst Jesse Toprak, in a statement: "December continues the trend of exceptional sales due to strong manufacturer incentives, specifically lease and finance deals, and the demand due to Hurricane Sandy in the Northeast. Even with the fiscal cliff still needing to be resolved, automakers can expect a strong year for new-car sales in 2013."

A strong housing market and the scheduled introduction of the 2014 Chevrolet Silverado are expected to boost pickup truck sales in 2013. The 2013 Dodge Ram is a candidate for the Automotive Press Association's Truck of the Year award, and some experts speculate that Ford (F) may be preparing to refresh the F150, the top-selling U.S. vehicle for more than three decades.

For December, Nesvold wrote, Ford sales should rise about 1.2%, with GM (GM) sales flat and Chrysler sales up 7.3%. TrueCar expects a 6% gain for Toyota (TM) and a 32% advance for Honda (HMC).

-- Written by Ted Reed in Charlotte, N.C.

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