HMC Honda Motor Co Ltd

By Mike Ramsey And Mike Spector 

Auto makers reported their strongest annual U.S. sales since 2006, taking advantage of low fuel prices and interest rates to rebound from a global financial crisis that hammered results and forced some companies to undergo government-brokered restructurings.

Sales of light cars and trucks in the U.S. rose 5.9% from a year earlier to more than 16.5 million in 2014, according to market researcher Autodata Corp. December sales were roughly 1.5 million, up nearly 11% from a year earlier, Autodata said.

The sales results buoyed car executives, blunting the overhang of a record year for recalls that began with General Motors Co.'s acknowledgment of a faulty ignition switch in older cars now linked to 42 U.S. deaths. Fiat Chrysler Automobiles NV also faces scrutiny over fiery crashes involving older Jeep models, and almost all car companies are dealing with the fallout from defective air bags manufactured by Japanese supplier Takata Corp.

But those recalls are taking a backseat in the mind of consumers wooed by low fuel prices, zero-interest financing deals and more money in their pockets. Car sales are surging ahead of new vehicle releases at this month's North American International Auto Show, and auto makers expect to keep up the improved sales pace this year.

"The 2015 economic indicators remain robust and the fundamentals are poised for a continuation of the momentum we saw in the latter part of 2014," said Ford Senior Economist Emily Kolinski Morris. She said low fuel prices are boosting consumers' disposable incomes alongside gains in the job market.

Still, auto sales gains are likely to cool this year and the Federal Reserve is poised to begin raising interest rates by mid-year. Auto executives and others played down any potential fallout from rising rates, suggesting that incremental increases would keep rates at historically-low levels and still entice buyers.

"This year looks pretty good," said Mark Wakefield, a managing director at turnaround and consulting firm AlixPartners LLP. He expects a moderate rise in auto sales this year largely because of low fuel prices but cautioned interest rates are "the big thing we worry about" starting around 2017. A significant rate hike can raise vehicle prices by thousands of dollars and force auto makers to ramp up incentives that "murder their profitability," he said.

Consumers are flocking to higher-margin and less fuel-efficient pickup trucks and sport-utility vehicles. "I am usually looking for the black swans when it comes to auto sales, but this year I see nothing but white swans," said Mike Jackson, chief executive of AutoNation Inc., the largest U.S. auto retailer.

"There had been a slow migration back to SUVs and pickup trucks. Now, with cheap gas, I think that may turn into a stampede. I think it will be very difficult for small cars and especially the hybrids and electrics," he said

GM and Chrysler posted double-digit sales gains in December. GM said its sales jumped 19% in December to 274,483 light vehicles. Pickup-truck sales added nearly 87,000, GM said. For the year, GM sold about 2.9 million light vehicles, the company said.

Chrysler said it sold 193,261 vehicles in December and more than two million units for the year, its best December in a decade and year since 2006. Chrysler benefited from strong demand for its Ram trucks and Jeep SUVs.

Ford Motor Co.'s sales were flat in December, rising slightly to 219,369. The figure was held back by intentionally fewer sales to rental-car companies and a limited supply of its best-selling F-150 pickup. Ford said it sold nearly 2.5 million vehicles in 2014, down slightly from a year ago.

Ford's weaker results pushed its shares down 3.9% amid a broad market decline. GM shares fell 1.5%, Toyota was off 1.8%, Honda 2% and Fiat Chrysler lost 3.8%, all in 4 p.m. New York trading on Monday.

December is traditionally a strong month for auto sales as auto makers offer holiday deals and discount to clear out older models. Consumers are currently flocking to showrooms amid low gasoline prices and an improving U.S. job market.

The month marked the highest average transaction price on record for light vehicles, according to Kelley Blue Book. The average rose nearly 3% year-to-year to $34,367 and was up 1.6% from November.

GM said much of its 19% December sales increase over a year earlier came from retail transactions, while pickup-truck sales surged 43%. The company said it was its best December since 2007.

Ford's combined truck and SUVs sales rose 4% in December although sales of its F-series pickups fell slightly for the month. Its car sales, meanwhile, declined 1.1%.

Nissan Motor Co. said it sold 117,318 vehicles last month, up 6.9% from a year earlier. Much of the gain came from its car sales, which rose more than 12%. The company's Sentra, Altima and Leaf cars posted strong gains. The Japanese company said it set an annual U.S. sales record of 1.4 million light vehicles.

Honda Motor Co. said it sold more than 1.5 million vehicles in the U.S. during 2014, the company's second-best total. Its U.S. sales last month rose 1.5% to 137,281 vehicles, as growth in sport-utility sales offset a decline in car sales.

Toyota Motor Corp. said its overall U.S. December sales rose 13% from a year earlier to 215,057 light vehicles. Its full-year U.S. sales rose 6% to nearly 2.4 million vehicles, putting it third behind GM and Ford.

Toyota executives pointed to sales of trucks and SUVs driving the gains. In addition, the auto maker's 25-year-old luxury Lexus brand posted a monthly sales record of 39,879. Sales of its Camry sedans were up more than 5% in December, and up 5% to more than 428,000 for the year.

Sales of Toyota's Prius hybrid fell 8% and 12% for the month and year, respectively, amid low gas prices.

BMW AG reported an 11% December sales increase in its namesake brand, retaining its rank as the best-selling U.S. luxury brand for the month and year. It sold 41,526 vehicles last month and 339,738 for the year, topping Daimler AG's Mercedes-Benz brand, which was the second-best seller for the full year.

Toyota's Lexus brand was the second-best selling luxury brand for the month and third-best for 2014. Mercedes-Benz sales rose 3% for the month to 34,009 and 5.7% for the full year. Volkswagen AG's Audi luxury car unit said its December sales rose 13% to 19,238 and full-year sales rose 15%.

Write to Mike Ramsey at michael.ramsey@wsj.com and Mike Spector at mike.spector@wsj.com

Access Investor Kit for Daimler AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007100000

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664005

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664039

Access Investor Kit for Takata Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3457000002

Access Investor Kit for Toyota Motor Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3633400001

Access Investor Kit for Nissan Motor Co., Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3672400003

Access Investor Kit for Honda Motor Co., Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3854600008

Access Investor Kit for AutoNation, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US05329W1027

Access Investor Kit for Daimler AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US2338251083

Access Investor Kit for Ford Motor Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US3453708600

Access Investor Kit for General Motors Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US37045V1008

Access Investor Kit for Honda Motor Co., Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US4381283088

Access Investor Kit for Nissan Motor Co., Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US6547444082

Access Investor Kit for Toyota Motor Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US8923313071

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US9286623031