US car sales set new record in 2016 with strong December finish

The Ford logo is seen at the 2016 Washington Auto Show in Washington, DC.
The Ford logo is seen at the 2016 Washington Auto Show in Washington, DC.PHOTO: AFP

CHICAGO (AFP) - The US consumer buoyed carmakers to a big finish in 2016, with strong December figures released on Wednesday (Jan 4) putting total sales for the year over the top to beat the 2015 record.

Sales inched 0.4 per cent past the 2015 record for a total of 17.55 million vehicles sold, according to a tally by Autodata. The total was helped by a busy December shopping period, during which consumers traditionally seek year-end discounts.

Many auto makers reported sales gains in the final month of the year, for a combined 3.1 per cent rise in the US market. Light trucks and sport utility vehicles were up 8.3 per cent compared to the year-ago period, while passenger cars were down 4.7 per cent.

For 2016 sales, Ford reported its best year in a decade, while Nissan and Honda said they sold a record number of cars in the US.

Toyota and GM bucked the trend, with their total sales in 2016 down from the year earlier.

Still, GM remained upbeat about the prospects for 2017.

"Key economic indicators, especially consumer confidence, continue to reflect optimism about the US economy and strong customer demand continues to drive a very healthy US auto industry," GM chief economist Mustafa Mohatarem said in a statement.

"We believe the US auto industry remains well-positioned for sales to continue at or near record levels in 2017."

But some industry analysts say car sales likely are plateauing and could decline in 2017.

"Elevated inventories, a slow model-year transition and record incentive levels point to the challenges the industry will face in 2017," JD Power auto analyst Deirdre Borrego said.

"Going forward, automakers must maintain production and pricing discipline to achieve profitability, which is easier said than done."

Automakers have seen inventories of sedans swell, even as demand for trucks and SUVs have stayed robust. GM announced in December that it would close five US manufacturing plants for one to three weeks this month, in response to lower demand.

Still, the sales figures were mostly upbeat.

Even Volkswagen, which struggled much of the year thanks to a diesel emissions scandal that saw its sales decline 7.6 per cent for the year, reported a 20-per cent sales jump in December.

While the company's yearly sales figures remain below pre-scandal levels, its December sales have now surpassed what they were in 2013. The automaker's Golf SportWagen and Passat sedans led the way.

Ford managed a mere 0.3 per cent sales gain for December, but sold more than 2.6 million vehicles in 2016 - 61 per cent of them trucks and sport utility vehicles.

Nissan reported a banner 2016, with an all-time company record of 1.4 million vehicles sold in the US, up five per cent from the previous year. The company said its Rogue crossover vehicle was its best-selling model. December sales jumped 9.7 per cent compared to the year-ago period.

Honda reported a 10.3 per cent sales increase in December and a record 2016, with sales were up 3.2 per cent from the previous year for a total of 1.6 million units sold. Honda's popular SUV, the CR-V, was a sales leader, but so were its Civic and Accord sedans.

Toyota said US sales increased two per cent in December, but declined two percent for 2016 to 2.4 million vehicles.

GM reported a 10 per cent increase in the month compared to December 2015, led by its Chevrolet brand, which had its best year since 2006. But the biggest US automaker said total sales fell 1.3 per cent in 2016 from 2015, to just over three million vehicles.

The North American subsidiary of Fiat Chrysler, FCA US, recorded another bad month, as US sales fell 10 per cent, following the 14-per cent drop in November.

The company said total 2016 sales were flat compared to the previous year. The bright spots were Ram truck sales, which increased 10 per cent, and some Jeep models, which also posted gains.

German carmakers had mixed results. Mercedes-Benz squeezed out a 0.1 per cent gain year-over-year for its best year in the US market with 380,752 vehicles sold, while BMW continued to struggle, selling 5.4 per cent fewer units in the final month of the year and 9.7 per cent fewer for the year. BMW sold 365,204 vehicles, with the moderately-priced 3 Series sedan by far the most popular among the lineup.