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WESTLAKE VILLAGE, Calif. — J.D. Power and Associates doesn't believe an increase in fleet sales in June is strong enough to fully offset weaker-than-expected retail sales.

As a result, firm analysts expect a decline in the total new-vehicle selling rate from May after gathering real-time transaction data from more than 8,900 retail franchisees throughout the United States.

J.D. Power contends June new-vehicle retail sales are expected to come in at 768,000 units, which represents a seasonally adjusted annualized rate (SAAR) of 8.6 million units. The company believes June's selling rate is expected to be down from May's selling rate of 8.9 million units, but up from a selling rate of 8.2 million units in June 2009.

Jeff Schuster, executive director of global forecasting at J.D. Power, emphasized that retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"With the improving economic environment, retail sales should be stronger than they currently are, but June marks the second consecutive month with a selling rate below 9 million units," Schuster explained.

"In spite of the more favorable conditions, it appears that consumers remain skittish and have yet to respond by buying vehicles at expected levels," he continued.

J.D. Power expects that fleet sales should be somewhat strong in June. The company predicted volume to total 203,000 units — up 59 percent from June of last year.

Adding that figure into the mix, analysts' forecast for total light-vehicle sales for June is 971,000 units, which is 13 percent than one year ago.

Given what it believes to be continued weakness in the retail market, J.D. Power decreased its retail sales forecast slightly to 9.5 million units from 9.7 million units. Its forecast for total sales remains at 11.8 million units.

"With the recovery not progressing as expected, it's gut-check time for the automotive industry," Schuster declared.

"The industry's discipline will be put to the test even more in the coming months if a more pronounced recovery doesn't get under way," he added.

Despite wavering sales, J.D. Power found North American vehicle production continues to experience significant increases in year-over-year volume.

Analysts noticed light-vehicle production in May totaled more than 1 million units. They said that calculated into a rise of 85 percent from May of last year.

J.D. Power expects production in June is expected to be strong, with the second quarter ending at 3 million units. The company determined that total would be 68 percent higher compared with the same period in 2009.

The latest analysis wrapped up with an indication inventory levels remain favorable. J.D. Power said days supply at the end of May decreasing to 49 days — eight days lower than at the end of April.

Therefore, J.D. Power adjusted its forecast for North American light-vehicle production in 2010 to 11.4 million units from 11.2 million units. That's a gain of 34 percent from 2009.