Take a breath, everybody. We have a new U.S. auto sales record: 17,539,052 units.
It’s in the books. Back-to-back record years, with 2016 finishing 56,211 vehicles ahead of the 2015 record, a gain of 0.3 percent.
As late as Tuesday the race looked to be the closest in more than a century of U.S. auto sales history, with Edmunds and LMC/J.D. Power forecasting a record by “less than 5,000” light vehicles and ALG predicting sales “just shy” of the record.
But thanks to a late-December surge, it wasn’t that close. Only the second closest year-to-year differential in records dating back to 1900. The closest was a 0.1 percent nail-biter in 1997, when volume rose by just 20,090 units over 1996.
But year-to-year sales comparisons are rarely close. This is a highly volatile business. Since 1900, only four times has the margin been less than 1 percent: 1997, 2016, 1957 (0.4 percent) and 2005 (0.5 percent).
I’m using the percentage change in annual volume as my measure for two reasons. First, it’s proportional to industry size. Second, I’m skeptical of accuracy beyond a century back. Comparing units, the closest “race” would be 1901 topping 1900 by 890 vehicles. Of course, that was a 39 percent increase from total industry volume of 2,288 in 1900, according to Polk registration data (now IHS Markit) in a 1986 Automotive News special edition.
That’s a fun factoid, but in 1900 I’m not sure all 45 states (Oklahoma, New Mexico, Arizona, Hawaii and Alaska were still territories) even required automobile registrations. I’ll stick to “modern era” sales data from, say 1916, when annual volume first topped 1 million.
Since then, a majority of year-to-year sales differences were double-digit percentages. Like I said, volatile.
So last year was remarkable. Remarkable for the rare close margin. Remarkable for being the seventh straight year of growth, the longest such string since the nine-year 1909-17 spurt, sparked by the November 1908 debut of the Ford Model T.
And remarkable for sustaining such a long string of growth in a mature market. It’s ridiculous that the comparison is a string built on an industry base of 58,713 sales of machines all started by hand cranks.
Let’s make one distinction. Industry sales records are individual, not industry, efforts. No manufacturer boosts incentives to set an industry record. Record years are a byproduct of many manufacturer and brand successes adding up.
So 2016 U.S. sales surpassed 2015 because:
- Lots of automakers, brands and even models were close enough to rivals, or to internal goals, to warrant year-end sales pushes: Toyota and Chevrolet for No. 2 U.S. brand; Mercedes, Lexus and BMW for top U.S. luxury brand; and Camry, Corolla, Civic and Accord for top-selling car.
- Jeep, Ram, Honda, Infiniti, Hyundai, Kia, Nissan, Subaru, Land Rover, Audi, Porsche and Mercedes-Benz set U.S. sales records.
- Some brands mounted December sales drives to reduce their overall losses for the year: notably Toyota, Chevrolet and Volkswagen.
- Fleet sales rose more than retail.
- Americans swung big time to light trucks, which surged 7.4 percent last year, which was more than enough to offset an 8.9 percent swoon in passenger cars.
- December weather was relatively mild, with only New England snowed in on New Year’s Eve.
- Manufacturers chose to bribe buyers in December, even more than they had most of the year. ALG estimated industry per-vehicle incentives jumped 20 percent in December to $3,673.
Throw in cheap fuel, low interest rates, easily available credit, a late-year surge in U.S. equity markets to improve buyers’ moods and a surge of attractive new models on the market, and it added up to a new volume record.