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 were sold 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 an annual 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 steeper interest rate and potentially lower incentive levels could damp sales.
Write to Anne Steele at Anne. Steele@wsj.com

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SEOUL – North Korea has been working through 2016 on developing components for an intercontinental ballistic missile (ICBM), making the isolated nation’s claim that it was close to a test-launch plausible, international weapons experts said on Monday.
North Korea has been testing rocket engines and heat-shields for an ICBM while developing the technology to guide a missile after re-entry into the atmosphere following a lift-off, the experts said.
While Pyongyang is close to a test, it is likely to take some years to perfect the weapon.
Once fully developed, a North Korean ICBM could threaten the continental United States, which is around 9,000 km (5,500 miles) from the North. ICBMs have a minimum range of about 5,500 km (3,400 miles), but some are designed to travel 10,000 km (6,200 miles) or further.
North Korea’s state media regularly threatens the United States with a nuclear strike, but before 2016 Pyongyang had been assumed to be a long way from being capable of doing so.
“The bottom line is Pyongyang is much further along in their missile development than most people realize,” said Melissa Hanham, a senior research associate at the U. S.-based Middlebury Institute of International Studies at Monterey, California.
She said the North’s test in April of a large liquid-fuel engine that could propel an ICBM was a major development.
“The liquid engine test was astounding,” Hanham said.
“For years, we knew that North Korea had a Soviet R-27 missile engine design. They re-engineered the design of that engine to double its propulsion.”
North Korea has said it is capable of mounting a nuclear warhead on a ballistic missile but it claims to be able to miniaturize a nuclear device have never been independently verified.
The isolated nation has achieved this progress despite U. N. Security Council imposed sanctions for its nuclear tests and long-range rocket launches dating back to 2006. The sanctions ban arms trade and money flows that can fund the country’s arms program.
North Korea has enough uranium for six bombs a year and much of what it needs for its nuclear and missile programs relies on Soviet-era design and technology. Labor is virtually free.
It can produce much of its missile parts domestically and invested heavily in its missile development infrastructure last year, funded by small arms sales and by taxing wealthy traders in its unofficial market economy.
Throughout the year, North Korean state media showed images of numerous missile component tests, some of which revealed close-up details of engines and heat shields designed to protect a rocket upon re-entry into the earth’s atmosphere.
The propaganda offensive may have revealed some military secrets, but it may have also been a bid to silence outside analysts, many of whom had remained skeptical of the North’s missile program.
“They’re answering the public criticisms of U. S. experts,” said Joshua Pollack, editor of the U. S.-based Nonproliferation Review. “A lot of people had questioned whether they had a working ICBM-class heat shield.”
“So they showed us.”
Despite the research, Pyongyang has experienced considerable difficulties getting its intermediate-range Musudan missile, designed to fly about 3,000 km (1,860 miles), off the ground. It succeeded just once in eight attempted launches last year.
North Korea has fired long-range rockets in the past, but has characterized those launches as peaceful and designed to put an object into space.
Still, the South Korean defense ministry believes the three-stage Kwangmyongsong rocket used by Pyongyang to put a satellite in space last February already has a potential range of 12,000 km (7,457 miles), if it were re-engineered.
Doing so would require mastering safer “cold-launch” technology, and perfecting the ability of a rocket to re-enter the earth’s atmosphere without breaking up.
“North Korea is working hard to develop cold-launch technology and atmospheric re-entry but South Korea and the U. S. will have to assess further exactly which level of development they have reached,” South Korean defense ministry official Roh Jae-cheon told a briefing on Monday.
North Korea began stepping up its missile development in March 2016, Roh said, but added that there were no “unusual signs” related to test preparations, according to the South Korean military.
That same month, Kim Jong Un was photographed looking at a small, ball-like object that North Korean state news agency KCNA said was a miniaturized nuclear warhead — the device North Korea would need to fulfill its ICBM threat.
“2016 marked the year North Korea truly ramped up their WMD (weapons of mass destruction) program,” Hanham at the Middlebury Institute of International Studies at Monterey said.
“I think we’re going to see a (ICBM) flight test in 2017.”

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