After a strong September, J.D. Power and Associates contends this month’s new-vehicle retail sales remain stable, sitting above a 10-million unit level.

October new-vehicle retail sales are projected to come in at 828,300 units, which represents a seasonally adjusted annualized rate of 10.5 million units. J.D. Power arrived at this estimation by gathering real-time transaction data from more than 8,900 retail franchised dealers throughout the United States.

Analysts calculated the year-over-year increase in the selling rate is expected to reach 11 percent — the second double-digit growth rate in a row after four months of single-digit growth. They insisted retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

“After a solid September selling rate, there were questions as to whether the strength would continue into October, given continued concerns with the economy,” stated John Humphrey, senior vice president of global automotive operations at J.D. Power.

“However, consumers are again returning to dealerships, keeping the sales pace more consistent with the strength seen at the beginning of the year,” Humphrey added.

With its retail projection in mind, J.D. Power determined total light-vehicle sales this month are expected to come in at 1,012,200 units, which is 11 percent higher than the figure from October of last year.

Analysts noted fleet sales are also expected to increase 11 percent, compared with last October and will account for 19 percent of total sales.

Update on Annual Sales Outlook

Given the continued strength in October, J.D. Power is maintaining its forecast for 2011 at 12.6 million units for total light-vehicle sales and 10.2 million units for retail light-vehicle sales.

However as the level of economic uncertainty remains high, J.D. Power decreased its forecast for 2012 to 13.8 million units for total light-vehicle sales, down from 14.1 million units. The firm also lowered its retail light-vehicle sales expectation to 11.2 million units from 11.5 million units.

“The risk of a double-dip recession has increased to nearly 40 percent, driving the reduction in the forecast for 2012,” explained Jeff Schuster, executive director of global forecasting at J.D. Power.

“While there have been recent positive signs in the economy and we expect another recession will not materialize, the recovery pace for 2012 is taking another hit, although a complete halt in growth is unlikely,” Schuster continued.

Look at North American Production

J.D. Power computed North American light-vehicle production through the first three quarters of 2011 is up nearly 9 percent (9.7 million units) from the same period a year ago.

Analysts believe the Japanese OEMs are continuing to recover from the earthquake/tsunami disaster earlier this year. However, they pointed out Japanese production is down 10 percent in the year-to-date production comparison.

The firm also highlighted the Detroit 3 OEMs have increased production by 14 percent year-to-date, while the European manufacturers are seeing a 41 percent increase, helped by BMW’s expansion in South Carolina.

Elsewhere, J.D. Power noticed vehicle inventory edged up slightly to a 50-day supply at the beginning of October from 49 days at the beginning of September.

Car inventory has increased to a 44-day supply, up from 40 days in September.

With some cuts in truck production, analysts mentioned truck inventory started October at 55 days, down from 57 days in September.

J.D. Power went on to state several manufacturers remain well below the industry norm of a 60-day supply. Hyundai/Kia began October with 25 days’ supply (was 21 days in September), while Honda stood with 33 days’ supply (previously 32 days). Also, BMW came in at 29 days’ supply (previously 33 days).

Analysts’ 2011 North American production outlook remained on track for 12.9 million units, an increase of nearly 9 percent from last year.

As inventory replenishment continues, J.D. Power concluded fourth-quarter production output is expected to reach 3.2 million vehicles, which is a 10-percent improvement from the same quarter in 2010.