General Motors, Toyota, Fiat Chrysler and Honda posted U.S. sales declines in December while Ford Motor Co. advanced and the industry finished the year strong despite falling short of 2016’s record.

Ford’s 0.9 percent increase marked its fourth straight monthly gain. GM fell 3.3 percent and FCA US was off as both companies pared back shipments to daily rental companies. Volume dipped 8.3 percent at Toyota and 7 percent at Honda last month, though American Honda set an annual sales record for the year.

Analysts had forecast that December would mark the 10th monthly drop of the year -- despite being the strongest month for raw volume. Annual demand was projected to fall for the first time since 2009 while topping 17 million units for the third straight year and the fifth time in history.

GM today pegged the December seasonally adjusted annual rate of sales at 18.2 million, which would be the second-highest tally of the year.

“In 2017, we had solid GDP growth and good news on employment, wages and consumer sentiment, which helped deliver very strong retail sales for the auto industry,” Mustafa Mohatarem, GM’s chief economist, said in a statement.

He forecast that light vehicle sales this year will be in the high 16 million-unit range as income gains stemming from U.S. tax reform are offset by rising interest rates.

Company results

Ford Motor Co.’s U.S. sales rose 1.3 percent in December behind strong light truck deliveries but not enough to prevent a second-straight annual decline in overall volume as demand for passenger cars continued to tumble.

Volume rose 2.4 percent at the Ford division on strong light truck volume but slid 17 percent at Lincoln behind a 26 percent plunge in car sales. In December, SUV demand rose 8 percent but car deliveries slid 5.5 percent, Ford said. For the year, Ford's U.S. deliveries slipped 0.9 percent.

General Motors' sales slipped 3.3 percent behind a decline of 2.9 percent at Chevrolet and 29 percent at Cadillac, even as the company fattened deals. Volume rose 4.7 percent at Buick and 1.2 percent at GMC. GM continues to pare back daily rental shipments but said it set new annual sales records for pickup and crossover deliveries, electric vehicles sales and average transaction prices.

At Toyota Motor Corp., volume fell 8.3 percent to 222,985 with sales off 7.2 percent at the Toyota brand and 14 percent at Lexus. Light truck deliveries, a bright spot for Toyota all year, dropped 5.6 percent last month.

FCA US reported a sales decline of 11 percent as the company dials back on fleet business. Led by a drop in volume of 12 percent at Jeep and 6.9 percent at Ram, every FCA brand except Chrysler and Alfa Romeo posted a decline in deliveries last month. 

Honda Motor Co. volume fell 7 percent on weaker car demand, with December sales off 6.3 percent at the Honda Division and 12 percent at Acura. Still, American Honda set an annual sales record of 1,641,429 units in 2017 -- an increase of 0.2 percent.

Among other luxury brands, volume rose 16 percent at Audi last month.

Sales were driven last month by continued strong demand for light trucks -- notably crossovers. Car and fleet volumes remained weak.

Low interest rates, steady job gains and surging U.S. equity markets are also supporting sales, automakers and analysts say. Those conditions may heighten competition next year.

"Automakers pull out all the stops to eke out every last sale before the end of the year,” said Edmunds analyst Jessica Caldwell. “With sales tapering off, we could be in for a high-stakes incentive war in 2018.”

The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, was off 1.4 percent through November.

While the tax reform bill signed by President Trump is expected to provide a lift to U.S. sales, analysts say any gains may be negated by rising interest rates.

SAAR outlook

Analysts polled by Bloomberg expect the seasonally adjusted sales rate for December to come in at 17.7 million, one of the highest rates of the year, but down from 18.13 million in December 2016 yet higher than November’s 17.55 million pace.

Company forecasts

Ahead of today’s reports, sales were projected by analysts polled by Bloomberg to fall at every major automaker: 1.8 percent at Ford Motor Co.; 2.2 percent at Nissan Motor Co., 4.1 percent at Honda Motor Co., 7.3 percent at General Motors, 8.4 percent at Toyota Motor Corp., and 11 percent each at Volkswagen-Audi, Fiat Chrysler and Hyundai-Kia.

Spiffs

The average new-vehicle incentive was tracking at $4,302 in the first few weeks of December, J.D. Power says. Year-end deals were projected to lift that figure to a record.

Led by GM, where discounts averaged just over $5,000 last month, industry incentives rose 2.4 percent last month to $3,844, up from $3,756 in December 2016, ALG estimated. (See chart below.)

Among the offers, the Volkswagen brand dangled deals with zero due at signing, no down payment, no security deposit and a first-month payment of nothing on many models. Buick offered up to 25 percent off the suggested retail price on remaining 2017 crossovers.

Quotable

“This year, many consumers will see their take-home pay rise because of tax reform," said Mustafa Mohatarem, GM’s chief economist. "That will keep the broad economy growing, and help keep sales at very healthy levels even as the Fed increases interest rates.”

Odds & Ends

The Toyota Camry remained the top-selling car in the U.S. in 2017, with sales of 387,081, well ahead of the Honda Civic at No. 2, with volume of 377,286. The Civic was ahead by 2,130 at the end of November ... There were 26 selling days last month vs. 27 in December 2016 ... Among major automakers, Fiat Chrysler and Hyundai-Kia are still looking for their first monthly sales gain of 2017. Among brands, Fiat, Jeep, Hyundai and Smart have yet to post a monthly advance in 2017 … Incentives, expressed as a percentage of MSRP, stood at 11.2 percent in early December, exceeding the 10 percent threshold for the 17th time over the last 18 months, J.D. Power says ... Average transaction prices closed the year on a strong note, rising nearly 2 percent in December 2017 to $36,113, a record high, mostly behind strong light-truck demand, Kelley Blue Book says ... And average new-vehicle transaction prices for all of 2017 finished 2 percent higher than last year, slightly slower growth than 2015 and 2016, at 2.5 percent, Kelley Blue Book says.