J.D. Power cuts 2011 U.S. auto sales forecast

J.D. Power and Associates cut its forecast on Thursday for 2011 U.S. total light vehicle sales, based on a slower economic recovery than previously expected.

Next year's total light vehicle sales forecast was cut to 12.9 million vehicles from 13.2 million.

"Gross domestic product in 2011 is now expected to grow at the same rate as in 2010, approximately 2.5 percent," said J.D. Power.

The marketing information firm also cut its sales forecast for 2010, to 11.5 million vehicles from 11.6 million.

That would still be an improvement over the 27-year low of 2009, when 10.4 million new vehicles sold in the United States.

J.D. Power's October forecast for U.S. sales is 11.9 million vehicles on an annualized basis, which would be the best sales month so far this year. In 2009, October sales were 10.5 million vehicles on an annualized basis.

"Despite the drag from high unemployment and lower incentive levels, improvement in the automotive market continues in October, suggesting that consumers are discounting the negative sentiment," said Jeff Schuster, director of global forecasting for J.D. Power.

The annualized forecast for October sales would show a slight gain from September's 11.76 million vehicles.

Retail sales -- not including bulk fleet sales -- will rise 17 percent from last October, to an annualized rate of 10.2 million vehicles, J.D. Power predicted.

Fleet sales in October are seen to be 18 percent of total sales, J.D. Power said.

North American auto production in 2010 has already topped the full-year 2009 figure of 8.5 million vehicles, it said.

"Production for several high-profile models -- such as the Chevrolet Cruze and Volt, Ford Explorer and Focus, and the Dodge Durango and Charger -- will start this quarter or will continue to ramp up, driving a strong production recovery at the close of 2010," said Schuster. "North American production levels are expected to grow by an additional 1 million units in 2011 to 12.7 million."