car dealership american flagsJustin
Sullivan/Getty

US auto sales rose for an unprecedented seventh straight
year in 2016, topping the record set in 2015. 

In December, sales rose at a seasonally adjusted annual rate of
18.4 million according to Autodata, smashing economists’ forecast
for 17.7 million. 

According to
Automotive News
, the gain in December pushed the pace of
sales last year up by 0.3% to a record 17.54 million cars and
light trucks. Automakers sold 17.4 million vehicles in 2015.

Among the so-called Big Three, GM led year-on-year growth in
December with an increase by 10%, topping analysts’
estimates. Ford and Fiat Chrysler also beat expectations.

Auto sales are considered a bellwether of consumer spending
because cars are among the most expensive items many households
buy. 

Sales last year were driven by lower gas prices, the
relatively high average vehicle age for cars on the road (over 11
years), easy credit, and incentives for buyers. 

Even better for automakers, consumer
s
were buying pickups and SUVs, which bring in the most
profits.

Because the market is cyclical, it’s possible that the plateauing
some strategists warned would happen last year took place.
Interest rates are slowly rising, commercial banks are tightening
auto lending standards, and the
subprime delinquency rate
— missed payments among people with
a tarnished credit history — is creeping higher.

Also, carmakers, who have dished out lavish incentives to attract
buyers, may face higher costs if the new administration
implements trade restrictions. On Tuesday, President-elect Donald
Trump threatened
a tariff on General Motors
for manufacturing a version of the
Chevy Cruze in Mexico.

Here are the year-on-year growth rates:

  • GM: 10% (4.4% expected)
  • Ford: 0.1%
    (-2.1% expected)
  • Fiat
    Chrysler: -10% (-14%
    expected)
  • Nissan: 9.7%
    (-2.8% expected)
  • Volkswagen of America: 20.3%
  • Toyota: 2%
    (-2.3% expected)
     
  • Mazda: -1.8%
  • Honda: 6.4% (-1% expected)