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U.S. December auto sales seen up 4 percent

By Bernie Woodall

DETROIT (Reuters) - December U.S. auto sales, spurred by end-of-the-year bargains, likely rose about 4 percent from a year earlier, industry analysts said.

If confirmed, that would mean 2013 will end as the best for U.S. auto sales since pre-recession 2007, at around 15.6 million new cars and trucks sold, which would be an increase of about 8 percent from 2012.

Major automakers report December sales on Friday.

U.S. consumers are expected to spend more than $34 billion on new vehicles in December, a historic high for the month, said J.D. Power & Associates, which said the annual sales haul would also be a record at more than $370 billion.

Auto sales continue to outpace the recovery of the U.S. economy. While auto sales are expected to rise again in 2014, the pace of the sales climb is expected to slow.

Factors that contributed to higher sales throughout 2013 were at play again in December, including low interest rates on loans, attractive lease deals and consumers wanting to replace older vehicles.

Plus, in December, there were manufacturer discounts as shoppers had time off during the holidays to visit a dealership, said Alec Gutierrez, analyst with auto research firm Kelley Blue Book.

December is one of the strongest months for U.S. auto sales, in part because of the bargains available, but also because consumers have developed over decades behaviors that favor end-of-the year buying, said Thomas King, senior director at J.D. Power & Associates.

December's typical rise in auto sales is often followed by a drop in sales in January. This past January, U.S. retail auto sales were down 40 percent from December.

Larry Dominique, president of auto industry research firm ALG, said discounts as deep as 25 percent from manufacturers' list prices were seen in December, including $5,000 off the price of a 2014 Ford Motor Co Focus hatchback.

The Ford F-Series pickup truck, the top-selling vehicle in America, has been discounted by 23 percent for a new F-150 Super Cab, Dominique said.

Economists surveyed by Thomson Reuters see the annual sales rate for December U.S. auto sales at 16 million vehicles, a level that has been topped only in November and August.

Incentives paid by manufacturers in December rose only about $100, while the average transaction price per vehicle rose to about $31,000 from about $30,200, which should help the profit margins for auto manufacturers, said Jesse Toprak, president of Topak Consulting in California.

General Motors Co , will see auto sales slide about 3 percent from a year earlier, while No. 2 Ford Motor Co , will sell about 5 percent more vehicles this month than a year ago, according to auto research firm TrueCar.com.

TrueCar also predicted that Toyota Motor Corp <7203.T> December sales will rise 3 percent, and Chrysler Group's will increase 4 percent. Chrysler's majority owner is Italy's Fiat SpA .

(Editing by Bob Burgdorfer)

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