With conditions ripe, February has appeared fairly rosy for the new-vehicle market and sales are likely to notch a strong improvement – albeit a single-digit increas — over the year-ago period, according to industry analysts.

That said, it’s not quite clear yet how the rest of the 2012 — or the coming years, for that matter — will unfold.

Offering one perspective, experts from LMC Automotive have upped their full-year projections to 14.0 million sales, as they anticipate the best new-car market in five years. These analysts have also cranked up their retail expectations from 11.3 million units to 11.4 million sales.

Additionally, LMC is also calling for movement toward “full recovery” in the U.S. car business and believes 16 million annual sales will be reached by 2014.

“Concerns about the financial crisis in Europe are not holding back the momentum of the automotive recovery in the U.S.,” stated Jeff Schuster, senior vice president of forecasting at LMC Automotive.

“The industry is currently well positioned for the best performance since 2007 and is expected to approach full recovery in the next two years with total light-vehicle sales at 16.0 million units by 2014,” he added.

Over at Kelley Blue Book, however, the firm is anticipating a slowdown later this spring and a more volatile year overall in 2012. Looking forward, KBB believes economic growth will be sluggish in coming years, and this will likely clog the automotive rebound.

“From a pure volume perspective, in the months ahead sales will continue to exceed last year’s figures, but this year there may be more volatility from month-to-month than in 2011,” stated Alec Gutierrez, KBB’s senior market analyst of automotive insights.

“Sales were remarkably flat from May through November 2011, due to the production woes faced by Toyota and Honda,” he continued. “Now that they are producing vehicles at full capacity, a return to traditional seasonal patterns is likely through 2012.”

Sharing a bit more on why KBB is cautious about sales in the coming years, the firm explained that it has some concerns about gas-price hikes and economic risks, calling these two factors “potential road blocks to continued improvements in new-vehicle sales.”

The dicey situation in Iran and possible Middle Eastern military action don’t make the situation any easier.

KBB pointed out that the close of Monday marked the highest oil price (close to $105) in nine months. Gas prices are on a steady 60-day hike and currently exceed year-ago levels by almost $0.40 a gallon.

That said, the Energy Information Administration believes this year’s gas prices will just modestly exceed those of 2011.

“If conflict in Iran is avoidable, Kelley Blue Book is hopeful that fuel prices will remain below the $4.00 highs of last year. In the worst case scenario, high fuel prices could slow the pace of the economic recovery and vehicle sales along with it,” KBB explained.

As for the economic woes, the sluggish economic recovery in the U.S. is likely to stay this way for this year and the next – and possibly longer – the firm said, citing a Congressional Budget Office forecast.

Getting into some specifics, CBO has calculated the current unemployment to be 8.3 percent. When the fourth quarter of next year comes around, the office believes unemployment will be at 9.2 percent.

What’s more, analysts are projecting gross domestic product will only climb slightly this year (up 2.2 percent) and then increase just 1.1 percent next year.

“Given the expectations for weak economic growth during the next several years, Kelley Blue Book expects the pace of the new-vehicle sales recovery to slow,” KBB projected.

Sharing another interesting take on where car sales may be headed in 2012, Edmunds.com vice chairman Jeremy Anwyl blogged a little more than a week ago that weather has perhaps played a role in the sales uptick so far, and it may have some influence later on down the road.

“One factor to take into account when considering how sales will play out for the rest of the year is the benign weather that most of the country has recently experienced. This might account for much of the strong sales tempo and suggest that March might not see its usual jump in sales. Guess we will know soon enough,” he wrote.

February Projections

While the crystal-ball gazing may differ between analysts, one thing appears fairly certain: February is looking bright.

The forecast from LMC and J.D. Power and Associates is calling for 1.06 million new-vehicle sales this month, up 3 percent year-over-year. The resulting seasonally adjusted annualized rate, they project, would be 14 million, down from 14.1 million in January but up from 13.3 million in February 2011.

On the retail side of the new-vehicle market, J.D. Power and LMC are looking for 857,400 sales, marking a 5-percent year-over-year gain (adjusted for more selling days this February).

“Retail light-vehicle sales in February are strong, which makes us modestly optimistic about the growth of sales going forward,” stated John Humphrey, J.D. Power’s senior vice president of global automotive operations. “More so, we’re increasingly confident that the fundamentals are in place to continue to support an upbeat sector outlook for the coming year.”

Pent-up demand, a leasing upswing and a less-restricted consumer credit/long-term financing environment are the reasons they cite for this “optimism.”

Sharing more about the leasing uptick, J.D.Power/LMC pointed to a 20-percent lease penetration rate through the month’s first 17 selling days. This compares to  the 13-percent trough back in 2009.

What’s more, the penetration rate of 72-month loans has reached a five-year high this month (23 percent). This marks a 4-percentage point gain over the year-ago period.

And the share gains for 72-month loans have been widespread, as 20 of the 27 segments in the analysis from J.D. Power/LMC have included increases for this type of financing.

Compact sporty, sub-compact conventional and large utility segments are the segments where the uptick has been the greatest, they noted.

“We’re seeing a rebound in leasing and a slight improvement in credit availability, which is bringing customers that were shut out of the market two or three years ago back into dealerships," said Humphrey. “Both of these elements bode well for consumers in terms of making vehicles more affordable, which will drive more traffic into showrooms.”

Likewise, KBB is calling for new-vehicle sales to exceed 1.05 million units and approach the 1.06 million mark (up 6.3 percent year-over-year) in February. This would represent a SAAR of 13.8 million.

KBB touts stronger inventory levels, improved credit availability and stronger financing offers as pushing up February’s total, as well as the fact that it is a leap year.

Automaker Predictions

Among the eight OEMs included in KBB’s analysis, all but General Motors will likely improve from a year ago. Although Volkswagen (up 36.4 percent) leads this group, Chrysler (up 25.1 percent) is projected to post a formidable hike, as well.

“The Chrysler 200 didn’t sell in significant volume until March 2011, so Chrysler’s growth should level off beginning next month," said Gutierrez.

“Later in the year, Chrysler should experience another boost with the launch of the all-new Dodge Dart, a much-needed entrant into the already competitive compact segment,” he added. “Strong sales are expected in the compact and subcompact categories, especially as fuel prices continue to rise.”

Editor’s note: Stayed tuned for more Auto Remarketing stories in the coming days sharing more about how gas prices may impact segment sales, as well as a look at the current inventory and production dynamics.