Unexpectedly strong sales of new vehicles in the US last month propelled the industry to another record figure last year: 17.55 million sold.
That is the good news.
The bad news, though, is that the late push to beat the previous record, 17.47 million vehicles sold in 2015, came at a steep cost, as companies piled on higher sales incentives to lure consumers to their showrooms.
And with the US market tilting more than ever toward sales of pickup trucks and sport utility vehicles, companies are cutting production of passenger cars to reduce big inventories of slow-selling models.
As a result, there is little expectation that the sales will continue on this upward trajectory — at least not without cutting deep into profits. That means the numbers released on Wednesday could be the high-water mark for the industry’s impressive comeback from the depths of the recession, when annual sales fell below 11 million vehicles and General Motors and Chrysler needed government bailouts to survive.
Adding to the challenge is the potential for major changes in federal regulatory and trade policies by US president-elect Donald Trump’s administration, setting up an uncertain year for an industry that has been barreling along.
“One of the problems with predicting 2017 is it is the year of unknowns,” said Michelle Krebs, an analyst with the car-shopping site Autotrader. “We are hearing a lot of different things about border tariffs and regulatory policies, but we don’t know what the whole picture looks like.”
The industry sold 1.69 million vehicles during the month of December, an increase of about 3 percent from the same period a year earlier, according to the research firm Autodata. The 17.55 million sold over the year was a gain of 0.4 percent.
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