October Auto Sales Looking Bullish, But Real Recovery Still Distant

October 21, 2010
For much of this year, automakers overall have become smarter about controlling inventories and slowing production to match still-tepid demand at dealerships. But it looks like some assembly plants are (or will be) roaring back to capacity for a while: A number of new 2011 models, such as the Chevrolet Cruze, Chevrolet Volt, Ford Explorer, Ford Focus, and Dodge Durango will stoke a strong U.S. production recovery in coming months, predicts J.D. Power and Associates.

J.D. Power is predicting new-vehicle retail sales of 756,030 units in October—that's 17 percent higher October 2009—with total vehicle sales (including fleets) at 922,700 units,

But while those new vehicles might be poised to sell well initially, the market as a whole will continue to sputter into next year.

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

Power predicts that production levels will stay strong in 2011—up one million units, to 12.7 million—which indicates that the auto industry believes that a recovery is underway.

But if there's a recovery happening, it's weak. Next year's sales are currently predicted to be 10.5 million units retail and 12.9 million units total. Power just adjusted those numbers down (from 13.2 million).

[J.D. Power & Associates]

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