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U.S. auto sales forecasts lowered by J.D. Power

J.D. Power and Associates cut its U.S. auto sales forecasts for the remainder of 2010 and 2011 as it expects a slow economic recovery, the consultancy said Thursday.
/ Source: Reuters

J.D. Power and Associates cut its U.S. auto sales forecasts for the remainder of 2010 and 2011 as it expects a slow economic recovery, the consultancy said Thursday.

The lower forecasts come amid deepening concern about a double-dip U.S. recession and a day after General Motors Co. filed for an IPO and said the chance of weaker auto sales was a major risk for the company's success.

J.D. Power cuts its 2011 sales forecast to 13.2 million light vehicles, down from a previous forecast of 13.7 million.

Its 2010 forecast was lowered to 11.6 million vehicles from 11.7 million.

While the 2010 figure is an increase from the decades-low sales of 10.4 million vehicles in 2009, it is the latest in a series of declining forecasts for the industry made by major automakers and analysts.

Recent forecasts and sales figures are well below the average U.S. annual sales rate of 16.4 million vehicles in the years 2000-2008.

Also Thursday, the U.S. Labor Department reported that claims for unemployment benefits rose to a nine-month high last week.

J.D. Power lowered its forecast for 2011 retail sales, which are often seen as a better indicator of the health of the industry than overall sales, to 10.7 million vehicles from 11.3 million. Retail sales do not include bulk, or fleet, sales to businesses, government and rental car agencies.

Cautious consumer spending, due in part to the lingering high unemployment rate, is a key reason for the lower forecast, said Jeff Schuster, director of global forecasting for J.D. Power.

"While a sharper uptick in vehicle sales was previously expected for 2011, the reality of a prolonged recovery has driven a reduction in the forecast," he said.

Total light vehicle sales for August were forecast at a seasonally adjusted annual rate of 11.8 million, down from 14.1 million a year earlier, when August sales were boosted by the U.S. government's cash-for-clunkers sales incentives.