SYDNEY, Jan 5 (Reuters) - Australia boasted another record year of new vehicle sales in 2016 with the market showing a distinct shift in preference to pick up trucks and sport utility vehicles, while all the growth was driven by business demand.

The Australian Federal Chamber of Automotive Industries' VFACTS report out on Thursday showed 1.178 million vehicles were sold last year, 2 percent higher than in 2015.

"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," said FCAI chief executive, Tony Weber.

Light commercial vehicles took 18.5 percent of the market in 2016, up from 17.2 percent the year before, a bullish sign for business investment.

Indeed, sales to businesses increased by 13 percent over the year, while rental sales rose 6 percent. In contrast, private sales fell by 5.8 percent and government sales by 1.4 percent.

Weber noted Toyota's Hilux topped the sales charts over the year, the first time a pickup truck won that honour.

For December alone, sales amounted to 98,763 vehicles a dip of 0.9 percent on December 2015. Sales of light commercial vehicles jumped 8.5 percent compared to December 2015, while passenger vehicles and SUVs slipped.

Toyota Motor Corp retained first place on the sales ladder for both December and the year. It took 17.8 percent for 2016, unchanged from the previous year.

Mazda Motor Corp held second spot for the year with 10 percent of the market, pipping Hyundai Motor at 8.6 percent.

The Holden unit of General Motors saw its share slip almost a full percentage point to 8.0 percent, while Ford held 6.9 percent of the market.

(Reporting by Wayne Cole; Editing by Eric Meijer)