Australia has posted its third vehicle market record in four years with 1,178,133 new passenger cars, SUVs and commercial vehicles sold in 2016, an increase of 2% on the previous year's record.

Vehicle sales in December totalled 98,763, slightly down (-0.9%) on December 2015.

The FCAI said the 2016 record year also marked a continued shift in buyer preference and market dynamics with a light commercial vehicle, the Toyota Hilux, topping the national vehicle sales charts over a 12-month period for the first time in Australian automotive history.

Releasing the 2016 full-year sales results, FCAI Chief Executive Tony Weber said the past decade had seen a remarkable change in the traditional composition of the Australian vehicle market as evidenced by the success of the Hilux as the nation's top-selling vehicle in 2016, and the growth of SUV sales.

"Calendar year 2016 marks the seventh year in a row that the Australian new car market has topped 1 million sales, and this result posts the industry's third record in four years," Mr Weber said.

"It is an intriguing and exciting time for industry watchers as there's little doubt we are observing a significant and dynamic transition in consumer preference. While buyer demand for traditional passenger cars remains healthy, it's clear consumers are gradually transitioning into other segments.

"The growth, as was witnessed in 2016 and appears certain to continue in 2017, is in SUVs and light commercial vehicles, particularly dual cab utilities.

"New models with significant performance and comfort attributes, combined with the existing vehicle mix, continued to make Australia one of the most competitive new car markets in the world.

"It's this level of competition, and the diversity of more than 400 models on offer, which drives value for the Australian consumer.

"This variety of choice and value, combined with 24 quarters of national economic growth and  low interest rates has created a confluence of positive factors to encourage motor vehicle sales."

Mr Weber said SUV sales, in particular, continued to grow in 2016 with that vehicle type now accounting for 37.4% of the market, up from 35.4% in 2015.

Light commercial vehicles held 18.5% of the market in 2016, up from 17.2% in 2015.

For calendar year 2016, Toyota led the market with 17.8% share, followed by Mazda with 10%, Hyundai (8.6%), Holden (8%) and Ford (6.9%).

Australia's top-selling vehicle for 2016 was the Toyota Hilux with 42,104 sales. This was followed by the Toyota Corolla with 40,330 sales, Hyundai i30 (37,772), Ford Ranger (36,934) and Mazda3 (36,107).