By Anne Steele
General Motors Co. logged a 10% rise in U.S. auto sales in December, signaling the industry remains on track to set an annual record.
The Detroit auto maker posted sales of 319,108 in the month, up from 290,230 last year. GM said retail sales rose more than 3% to 249,983 vehicles -- it's best performance in a decade.
U.S. light-vehicle sales in 2016 are expected to have slightly edged out a record set last year, according to a J.D. Power forecast, largely owing to high incentive levels that helped prop up retail sales.
Analysts expect about 17.4 million to 17.5 million vehicles weresold in 2016, which would put the year at similar levels compared with last year's record of 17.5 million units.
Retail sales, which strip out sales to fleet buyers, are expected to reach 14.1 million units for the year, a 1.2% decline from 14.2 million units in 2015.
"This year will be remembered for strong retail sales and record transaction prices," said Deirdre Borrego, general manager of J.D. Power's automotive data and analytics. "However, elevated inventories, a slow model-year transition and record incentive levels point to the challenges the industry will face in 2017."
Ms. Borrego said December, a month that typically delivers the highest incentive spending of the year, is expected to have exceeded the record set in November of an average of more than $4,000 per unit.
While December sales were tracking to finish lower than last year, dealers and auto makers were hustling to squeeze out just enough units for anannual record, said Edmunds.com analyst Jeremy Acevedo.
U.S. light-vehicle sales are expected to drop 2.2% in December compared with last year, according to J.D. Power. The month had one fewer selling day than in December 2015. On a selling-days-adjusted basis, sales are expected to increase 1.4%.
Trucks are forecast to account for 64% of December's volume, a record for any month, according to WardsAuto.com. That helped push the estimated average transaction price for light vehicles in the U.S. to $35,309, a record high, according to Kelley Blue Book. New-car prices have increased by $521 -- or 1.5% -- from December 2015, thanks to a shift in consumer demand from cars to pricier crossovers, trucks and SUVs.
Ms. Borrego said in 2017, auto makers will have to "maintain production and pricing discipline to achieve profitability." Experts say a high number of lease maturities will drive sales over the next year, although a steeperinterest rate and potentially lower incentive levels could damp sales.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 04, 2017 10:02 ET (15:02 GMT)
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