U.S. light-vehicle sales, led by generous incentives, strong light-truck demand and solid gains at several manufacturers in December, hit a record high of nearly 17.54 million vehicles in 2016, just edging out the previous record (set in 2015), by 0.3%. It was the seventh straight year of sales gains. Pent-up demand, more leasing, favorable finance deals, steady job growth, growing consumer confidence and low gas prices have driven new-vehicle sales since the Great Recession.
Automakers and dealers used heavy promotions and generous deals to lure consumers into showrooms in the final weeks of 2016. Analysts estimate that average incentives on new vehicles spiked 20% to $3,673 last month, compared with December 2015.
Light trucks, led by crossovers, continued to drive the market and accounted for a record 60.7% of all light-vehicle deliveries in 2016. For the year, car demand dropped 8.9%, while light-truck deliveries increased 7.4%. But analysts warn that rising interest rates and a peaking retail market will force automakers to cut production this year.