WESTLAKE VILLAGE, Calif. -

J.D. Power and Associates insisted new-vehicle retail sales have rebounded during the first half of June as consumers — despite mixed economic signals — returned to dealerships.

Analysts pegged June new-vehicle retail sales to come in at 884,800 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.9 million units. They pointed out the retail selling rate is showing marked improvement from May’s 9.3-million-unit level.

J.D. Power thinks large pickup and compact car sales are supporting the overall retail sales increase.

The firm said large pickups are accounting for 10.6 percent of retail sales month-to-date — the highest level since February — while compact cars comprise 17.6 percent of retail sales, up from 17.2 percent in May.

Analysts reiterated retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles as they gather real-time transaction data from more than 8,900 retail franchisees throughout the United States.

“There has been some easing of negative variables in June, as the inventory shortage has not been as severe as expected, and gas prices have dropped noticeably from higher levels in April and May,” explained Jeff Schuster, executive director of global forecasting at J.D. Power.

“Provided that the economy decides to cooperate, the automotive summer slowdown will only be a speed bump, and a return of a measurable recovery pace is still expected in the second half of 2011,” Schuster continued.

J.D. Power also calculated total light-vehicle sales in June are expected to settle at 1,106,400 units, which is 8 percent higher than the same month last year.

The firm also indicated fleet sales are estimated to be lower in June due to the inventory shortages and are projected to finish the month at 221,600 units, down 9 percent from June 2010.

Analysts acknowledged that even as some of the pressure has lessened, the level of U.S. economic uncertainty remains high.

As a result, J.D. Power slightly reduced its forecast for 2011 retail sales to 10.5 million units from 10.6 million units. The forecast for total sales has been revised to 12.9 million units from 13 million units.

“Conditions for light-vehicle sales are improving, but the automotive market remains fluid and susceptible to a slower economic recovery or external shock,” stated John Humphrey, senior vice president of automotive operations at J.D. Power.

“This risk is driving a more cautious approach to the market outlook for the remainder of 2011 and into 2012,” Humphrey went on to say.

North American Production

In addition to its new-vehicle sales projections, J.D. Power discussed OEM vehicle production.

Through May, analysts believe light-vehicle production for North America on a year-to-date basis is up 10 percent from the same period in 2010. They also contend volume for the first five months of 2011 came in at 5.3 million units, compared with 4.8 million units built during the same period in 2010.

J.D. Power surmised that production for Japanese manufacturers has declined nearly 13 percent thus far this year, as parts shortages have caused volume disruptions.

However, analysts noted the recovery pace has been accelerated and most operations are expected to return to pre-disaster levels in the coming weeks.

“In addition to the recovery of volume with the Japanese brands, production has been ratcheted up among the Detroit Three and European and Korean brands,” analysts pointed out.

“The Detroit Three are up 18 percent year-to-date, compared with 2010. The European manufacturers are up 44 percent, and the Korean manufacturers are up 56 percent for the same period,” they highlighted.

J.D. Power also mentioned inventory levels declined to 49 days’ supply at the beginning of June, five days less than the previous month’s 54 days’ supply.

“This drop was not as severe as expected, but is consistent with the decline in the selling pace in May,” J.D. Power explained.

“Inventory conditions should improve in the coming months, but many smaller size models and some Japanese imported models will remain in very short supply for the near future,” the firm continued.

“Given the positive news of a faster stabilization with the Japanese manufacturers and higher-than-expected increases by the Detroit Three, J.D. Power’s North American production forecast for 2011 is again back to the 12.9-million-unit level,” analysts concluded.