The numbers are in and it’s been another record-setting year for the auto industry.
Automakers sold more than 17.5 Million vehicles in 2016. Stronger than expected sales from GM, Nissan and Honda in December, along with the demand for light pick-ups/crossovers and big year-end incentives, helped the industry hit the new high mark.
Overall, sales rose by more than 56,000, or 0.3 percent, over the 2015 record. It marks the seventh straight year of sales gains, an impressive streak for an industry hit hard during 2009’s recession.
U.S. light-vehicle sales totaled 15.85 million through November. That was just 6,418 ahead of the year-earlier pace, a clear sign the market was going to break a record, as I mentioned on the Car Pro Show on December 31st.
Overall, volume rose 3 percent in December, well ahead of forecasts, pushing 2016’s final sales tally to 17,539,052 cars and light trucks. GM saw the biggest sales increase. Volume rose 10 percent at GM for a second straight month. Nissan wasn’t far behind with 9.7 percent and American Honda posted a 6.4 percent gain. Smaller gains from Toyota with 2 percent and Ford 0.1 percent. One automaker who didn’t help push the numbers up was Fiat Chrysler. FCA recorded its third straight double-digit decline.
All four of GM’s U.S. saw sales increases in December. Chevrolet led the way with a 13 percent increase, followed by GMC (5.8 percent), Cadillac (3.2 percent) and Buick (2.8 percent). GM said its rental sales rose in December but finished 2016 down nearly 74,000 vehicles, or 18 percent, compared with 2015. The company said its retail deliveries, which has been a key priority in recent years, rose more than 3 percent.
Nissan’s December increase reflected an 8.3 percent gain at its namesake division and a 21 percent jump at Infiniti. Also at Nissan the big news is that the Rogue crossover topped Altima sedan sales to become Nissan’s top-selling U.S. model for the first time. Rogue sales were up 329,904 in 2016, up 15 percent. Overall, the Nissan division set an all-time record with 1,426,130 U.S. sales in 2016, up 5.5 percent.
Volume rose 6.9 percent at the Honda division and 1.9 percent at Acura. For the year, Honda Division’s U.S. sales rose 4.8 percent to a record 1,476,582.
At Ford, sales were off 0.8 percent at the Ford division and up 18 percent at Lincoln.
Toyota reported December volume edged up 2.6 percent at the Toyota division, but slipped 0.5 percent at Lexus.
Deliveries dropped 10 percent at Fiat Chrysler, behind a 6 percent decline at Jeep and a 34 percent drop in fleet shipments. Ram was the only FCA US brand to gain last month, rising 10 percent. Jeep and Ram posted U.S. sales records last year.
Volume dropped 1.9 percent at Hyundai, but rose 0.2 percent at Kia.
Sales rose for the second straight month at the VW brand, but were down 7.6 percent for the year.
At Mazda, volume dipped 1.8 percent last month.
December deliveries dropped 6.4 percent at Mitsubishi.
December deliveries fell 7 percent at Mini.
Among other brands, Infiniti, Kia, Land Rover, Mercedes-Benz, Hyundai, Subaru, Audi and Porsche also set annual U.S. sales records in 2016.
Light trucks, led by crossovers, continue to drive the market and accounted for a record 60.7 percent of all light-vehicle deliveries in 2016. Sedans didn’t fair so well. For the year, car demand skidded 8.9 percent while light-truck demand advanced 7.4 percent.
Car makers had one more weekend last month to sell cars than in December 2015, but overall there was one less selling day. Automakers and dealers used heavy promotions and generous deals to lure consumers to showrooms last month. A post-election bounce in U.S. equity markets also provided a lift to industry sales in December, some analysts say.
ALG estimates that average incentives on new vehicles spiked 20 percent to $3,673 last month compared with December 2015. Among the biggest spenders on December discounts were the Detroit 3 and Volkswagen Group. Even Subaru, which has been able to offer some of the industry’s leanest new-vehicle deals, saw average incentives more than double to $1,162 last month, ALG says.
Since the 2008-09 Great Recession, U.S. light-vehicle sales have grown by more than a million units a year on average while delivering seven straight annual gains, the longest streak since 1909-17. The key factors in the upturn are pent-up demand, more leasing, favorable finance deals and steady job growth.
But it may not last. Analysts warn rising interest rates and a peaking retail market will force automakers to cut production this year.
As I have talked about for a while on the Car Pro Show, production of new vehicles will slow in 2017, and so will incentive spending by automakers, but honestly, it is always hard to say. Who knows what will happen in 2017? Could be another record year!