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US sales of new cars and trucks hit a record high in 2016, automakers said on Wednesday, and investors bid up shares in the sector as strong consumer confidence and relatively low fuel prices bolstered the industry's outlook.
Shares of General Motors Co rose 5.5 per cent.
Autodata Corp said 2016 US auto sales of 17.55 million were 0.4 per cent higher than the previous record set in 2015.
December sales rose 3 per cent, and on a seasonally adjusted annualised basis were 18.43 million vehicles, Autodata said. That widely beat expectations of economists polled by Thomson Reuters of 17.7 million vehicles.
The results prompted executives from the three biggest sellers in the US market, GM, Ford, and Toyota Motor Corp, to predict that this year's sales will be near 2016's record levels.
In December, U.S. consumer confidence reached levels not seen in 15 years. Auto sales are an early indicator of consumer spending, and account for about a fifth of U.S. retail spending.
Demand for pickup trucks and SUVs stayed strong in December.
Ford said it sold 87,512 F-Series pickups in December, the lineup's best overall sales month in 11 years. The F-series was the best-selling model line in the United States last year, for the 40th year in a row.
Rogue, a compact SUV from Nissan Motor Co, <7201.T> in December was the fourth best-selling model in the US market and showed a sales increase of 53 percent from a year earlier.
Pickups and SUVs accounted for 59.5 per cent of 2016 auto sales, up from 55.8 per cent in 2015.
Pickup trucks and compact SUVs held the first six spots in the monthly top-selling models list, as reported by the automakers.
Strong consumer discounts, also called sales incentives, also helped December's sales.
December consumer discounts averaged about $4,000 per vehicle, up by about $500 from a year earlier, according to J.D. Power data provided to Reuters.
Discounts erode automakers' profits but GM said the average transaction price for its vehicles rose $740 from November to $36,386 in December, reflecting in part strong sales of large SUVs such as the Chevrolet Tahoe. That is important to investors because Detroit's automakers make the bulk of their global profits from sales of trucks and SUVs in North America.
Industry executives have cautioned for several months that the US market's post-financial crisis recovery was due for a slowdown, but such concerns seem to be easing.
"Key economic indicators, especially consumer confidence, continue to reflect optimism about the U.S. economy and strong customer demand continues to drive a very healthy US auto industry," said Mustafa Mohatarem, GM's chief economist.
Fiat Chrysler Automobiles NV FCAU.N> was a laggard in December, as its sales slid 10 per cent. FCA's Jeep brand reported sales down 6 per cent.
