DETROIT—U.S. auto sales increased 2.2 percent in December, capping a year that saw overall volume rise 0.6 percent even as auto makers endeavored to counter slumping car demand with higher light-truck deliveries.
December, with sales of 1.639 million, turned in the second-best month of the year on a volume basis. The final sales tally for 2018 was 17.33 million cars and light trucks, making it the fourth-biggest year on record.
The robust December seasonally adjusted, annualized rate of 17.72 million easily topped December 2017's SAAR of 17.44 million and November's 17.55 million sales pace.
"New vehicle sales were surprisingly strong in 2018 despite late cycle headwinds from higher interest rates and more nearly-new competition in the used market," said Jonathan Smoke, chief economist for Cox Automotive. "The key positive factor was stimulated demand from tax reform, which strengthened retail demand as the year progressed and also enabled strong gains in fleet sales."
Generous discounts and steady economic growth fueled new-vehicle sales throughout the year. U.S. consumers also appeared to shrug off slumping stock prices in December. U.S. sales had risen 0.4 percent through November, with higher fleet shipments offsetting a slight dip in retail demand during the year, analysts say.
Overall, U.S. light-truck sales rose 6.9 percent last month and 7.7 percent in 2018, while car deliveries slid 8.2 percent in December and 13 percent for the year, marking the fifth straight annual decline in car volume.
"U.S. sales in 2018 proved more resilient than initially expected, with an accelerated transition to utility vehicles on new models becoming available and on pullback in passenger car production and passenger car incentives," Stephanie Brinley, principal automotive analyst with IHS Markit, said in a statement.
U.S. sales at FCA US, Honda and Nissan rose last month while Ford, General Motors and Toyota posted declines.
FCA US said December sales rose 14 percent, driven by gains of 10 percent at Jeep, 37 percent at Ram and 17 percent at Dodge. For the year, FCA's U.S. deliveries jumped 9 percent.
At Ford Motor Co., December sales dropped 8.8 percent, with volume off 9.6 percent at the Ford division but rising 8.5 percent at Lincoln. For the year, Ford sales dropped 3.5 percent behind an18 percent decline in car deliveries.
GM's U.S. sales dipped an estimated 3.7 percent last month. GM said it sold 785,229 light vehicles in the fourth quarter, a decline of 2.7 percent from the last three months of 2017.
Overall, GM's U.S. sales fell 1.6 percent to 2.95 million last year, with every brand posting lower volume. Buick, down 5.6 percent, led the decline. GM said its U.S. car sales slid 24 percent in the fourth quarter and 21 percent for the year, while light-truck demand rose 2.4 percent in 2018.
At Toyota Motor Corp., December volume dropped 0.9 percent, with sales down 1.1 percent at the Toyota brand but rising 0.2 percent at Lexus. For all of 2018, Toyota's U.S. sales edged down 0.3 percent, with car demand falling 12 percent and light-truck shipments up 7.9 percent.
It was the third straight drop in annual U.S. sales at GM, Ford and Toyota—the market's top sellers.
Nissan Motor Co. volume rose 7.6 percent last month, including a 7.2 percent gain at the Nissan brand and 10 percent rise at Infiniti. The company's overall 2018 sales dropped 6.2 percent behind a move to lower discounts and fleet business.
American Honda said December sales rose 3.9 percent, with volume up 3 percent at the Honda brand and 11 percent at Acura. But total 2018 volume slipped 2.2 percent, with the Honda brand down 2.8 percent but Acura sales rising 2.8 percent.
Subaru rolled to another annual U.S. record, with December volume rising 1.9 percent, and 2018 sales of 680,135, a gain of 4.9 percent. It was the tenth consecutive year of record U.S. sales for Subaru and the eleventh consecutive year of gains.
Sales last month rose 5.6 percent at Hyundai, 10 percent at Kia and 5.8 percent at the VW brand.
Among other auto makers, Mazda reported a 3.8 percent decline in December deliveries but a 3.8 percent increase in 2018 sales, and Mitsubishi said December sales rose 5.7 percent, with 2018 volume finishing 14 percent higher.
Along other luxury brands, December deliveries rose 33 percent at Land Rover, 1.4 percent at Jaguar and 4.4 percent at Porsche, with the German luxury brand setting an annual U.S. sales record of 57,202 units. Volume dropped 8.8 percent at Volvo and 69 percent at Genesis.
For 2019, most early forecasts see total industry sales coming in at 16.8 million to 17 million units, with some estimates as low as 16.7 million. That would mark the first total below 17 million since 2014.
Brinley said the expansion of the mid-size pickup segment will garner enthusiasm and sales for 2019, while new mid-size and compact CUVs will serve to enable these brands a path for retaining sedan buyers who might otherwise leave.
"Auto makers will continue shifting showrooms from cars to utilities," Brinley said. "While the decline in passenger car sales in 2019 is not expected to be quite as sharp as in 2018, conditions suggest the bottom for passenger-car share has not yet been found."
Christopher Hopson, IHS Markit's manager of North America light vehicle forecasting, said in a statement that the firm expects rising interest rates, moderating growth in OEM incentive levels and competition from the used car market to impose some pressure on new vehicle demand.
IHS Markit projects auto sales to reach 16.8 million units in 2019.
While interest rates are rising and used-vehicle supplies are growing, new-vehicle sales continue to be supported by light-truck demand, employment gains, healthy economic growth and low gasoline prices.
"Despite recent market turbulence, the data we have in hand suggests an economy that remains on solid footing heading into the new year," Ford Chief Economist Emily Kolinski Morris said during a conference call with analysts and journalists. "Consumers seem to be looking through market volatility to focus on continued positive job and income conditions."
Rubber & Plastics News contributed to this report.